- Created on Tuesday, 03 September 2013 05:35
- Written by Advanced Aquatic Products
SEPTEMBER 3, 2013 — Ocean Rig UDW Inc. (NASDAQ: ORIG) has signed a contract to construct a seventh generation ultra deepwater drillship at Samsung Heavy Industries. It will be a sister ship to the three drillships (Ocean Rig Skyros, Ocean Rig Athena, Ocean Rig Apollo) currently under construction at Samsung, and is scheduled to be delivered by the shipbuilder in December 2015.
The project value price is estimated to be approximately $600 million. The contract includes a fixed priced option, declarable by November 2013, for an additional drillship for delivery in the first quarter of 2016.
Chairman and CEOP George Economou commented:
"We have taken advantage of our strong balance sheet and our long-term relationship with Samsung to order at a very attractive price an additional newbuild drillship, sistership to our existing seventh generation ultra deepwater drillships. We expect that our new drillship will be financed through a combination of available cash and debt to be secured prior to the delivery of the drillship in December 2015.
"With all of our 2013 newbuild drillships as well as our first 2015 newbuild drillship, the Ocean Rig Apollo, already contracted to investment grade counter-parties, we are setting the stage for moderate growth going forward. We believe that the ultra-deepwater drilling market for high quality assets will remain strong in the foreseeable future and are excited about the future employment prospects of our high quality homogeneous fleet."
Ocean Rig took delivery of its first seventh generation drillship, Ocean Rig Mylos, on August 20. It is currently mobilizing to offshore Brazil and is expected to commence drilling operations under a three year drilling contract with Repsol Sinopec Brasil S.A. by November 2013.
$1.35 billion Bank Facility
Ocean Rig also announced that it has signed a supplemental agreement to amend certain provisions in its $1.35b Senior Secured Facility dated February 28, 2013.
Under the terms of the agreement, the existing dividend restriction of up to 50% of preceding fiscal year net income will be amended to apply on a cumulative basis from July 1, 2013 onwards (50% of cumulative net income and 100% of cumulative losses) and include a carve-out to pay additional dividends up to the higher of (i) $150m and (ii) 5% of the company's net tangible assets.
Furthermore, the minimum interest coverage ratio requirement will be 2.0 times until June 30, 2015 and the maximum leverage ratio will be 6.5 times until June 30, 2014, 6.0 times until December 31, 2014 and 5.5 times until June 30, 2015.
"We are pleased that our syndicate of commercial banks and export credit agencies agreed to our request to amend certain provisions in their facility," said Mr. Economou. "These amendments will harmonize our restricted payment provisions and certain financial covenants with those of our other secured term loan facilities and notes."
Contract Extension for the Eirik Raude
Ocean Rig reported that Lukoil exercised its options for an additional two-well program under a previously announced contract award for the semi-submersible drilling rig Eirik Raude. The revised drilling contract is for a firm six-well program and the rig is now expected to be available for employment the earliest by December 2014.