Welcome!

Microsoft Cloud Authors: Kevin Benedict, Pat Romanski, Liz McMillan, Lori MacVittie, Elizabeth White

News Feed Item

SDRL - SapuraKencana Petroleum Berhad and Seadrill Limited Jointly Announce the Integration of Tender Rig Businesses

SapuraKencana Petroleum Berhad and Seadrill Limited Jointly Announce the Integration of Tender Rig Businesses

HAMILTON, BERMUDA -- (Marketwire) -- 11/05/12 --


· Proposed transformative transaction provides a strategic platform to create the first highly diversified and leading offshore services provider in Asia

· Enhanced business to comprise 16 wholly-owned operating units and five units currently under construction

· Further strengthens the long-standing partnership of SapuraKencana and Seadrill

SapuraKencana Petroleum Berhad ("SapuraKencana") (KLSE: SKPETRO) and Seadrill Limited ("Seadrill") (NYSE: SDRL) (OSE: SDRL) are pleased to announce that they have entered into a non-binding memorandum of understanding ("MOU") to combine and integrate both companies' tender rig businesses. The two companies including their predecessor companies have operated part of their tender rigs businesses together successfully in the joint venture Varia Perdana Sdn Bhd and Tioman Drilling Company Sdn Bhd since 1991. The new and restructured tender rig business will mark a new phase of cooperation between the two companies. The enlarged tender rig business under SapuraKencana will comprise, 16 tender rigs in operation (including the KM1 rig currently owned by SapuraKencana), 5 of which are already 51%-owned and managed through its existing joint-venture with Seadrill in Varia Perdana Sdn Bhd and Tioman Drilling Company Sdn Bhd, and an additional 5 units currently under construction, 3 of which will be acquired through this transaction and are expected to be delivered in 2013 ("Newbuilds"). In addition SapuraKencana will also be offered the right to be the manager for three further tender rigs which are not part of the transaction. These rigs, West Vencedor, T-15 and T-16, are today either owned or planned to be owned by Seadrill Partners LLC and are therefore not included in the transaction.

The operating rigs and the Newbuilds are all currently contracted under long-term fixed price contracts with companies such as Chevron, Shell, PTTEP, and Petronas Carigali. The total order backlog amounts to USD 1.55 billion as of end of October 2012. The majority of the operating rigs are currently deployed in Southeast Asian waters. Of the 15 operating rigs, 9 are barges and 6 are semi-tenders, which are capable of operating in water depths of up to 6,500 feet.

SapuraKencana will take over the rigs including the full tender rig organization for an enterprise value of USD 2.9 billion. The organization will continue to operate from the existing premises in Singapore. The total enterprise value includes USD 363 million in remaining capital expenditures linked to the newbuilds program and all the debt in the tender rig business including existing bank facilities that are expected to be approximately USD 800 million as of December 31(st) 2012. One of the main objectives of the transaction is to develop a strong leading player in the Far East market. Seadrill will, to support this position, receive a minimum of USD 350 million in new shares of SapuraKencana. This comes in addition to the 6.4% stake that Seadrill presently owns in SapuraKencana. Seadrill will further have the right to nominate two members to the SapuraKencana board of directors (including one alternate). Seadrill's chairman John Fredriksen is expected to be one of those members. The remaining consideration will be funded by SapuraKencana through a mix of external borrowings, a seller's note of up to USD 187 million, internally generated funds and equity.

The MOU further stipulates that the parties will seek to grow their joint venture activities in Brazil where they were awarded 3 PLSV contracts by Petrobras in 2011. The parties also agree to establish a joint venture between Seadrill's 40 % owned subsidiary Archer Limited and SapuraKencana. The scope of such venture will be to focus on developing and expanding Archer Limited's wireline services in the Far East Asian markets.

In order to complete the restructuring and consummate the transaction Seadrill will need acceptance from their tender rig organization as well as from the existing customers. The transaction is further subject to customary due diligence procedures, closing adjustments, regulatory approvals, and agreement between the parties on the terms of the sale and purchase agreement and other ancillary transaction documents.

The combination of SapuraKencana's and Seadrill's tender rig businesses provides a strategic platform for SapuraKencana's and Seadrill's shareholders to enhance their position as part of a highly diversified and leading offshore services provider globally with multiple growth opportunities and strong value creation potential. The transaction further fortifies SapuraKencana's business profile as it provides more exposure to a higher margin drilling segment, expands SapuraKencana's reach across the value chain, provides cross selling opportunities, and complements SapuraKencana's presence in key markets globally.

Commenting on the transaction, Dato' Seri Shahril Shamsuddin, President and Group Chief Executive Officer of SapuraKencana said: "Seadrill has been a great strategic partner for SapuraKencana for many years and this proposed transaction underpins this commitment and significantly strengthens SapuraKencana's business profile and ability to deliver long-term value for our shareholders. After a period of transformation and consolidation, I am truly excited about entering the next phase of growth in partnership with Seadrill to together create an undisputed Asian offshore services champion with a strong Malaysian identity. The combination of Seadrill's deep operational expertise, world-class customer access and ongoing transfer of knowledge is expected to propel SapuraKencana's competitive position and enable it to take advantage of the positive growth dynamics within the industry."

John Fredriksen, Chairman, President and Director of Seadrill was quoted to say "Seadrill believes in the potential of SapuraKencana's expansion, as well as its capability to mesh its existing services with Seadrill's tender rig business and crystallize value. As such, we are very supportive of the integration of our tender rig business with that of our long term partner, SapuraKencana and are excited to continue the very profitable and successful venture we have had with Sapura since 1991. The possibility to further build our JV venture in Brazil and also get a solid partner for Archer Limited in Far East Asian markets further highlights the benefit of the transaction. The net proceeds received from the transaction will be redeployed as equity to aggressively grow our deep water fleet and also open up for significant new investment in the Jack Up sector, a sector which recently has shown strong signs of improvement."

Dato' Mokhzani Mahathir, Executive Vice-Chairman of SapuraKencana added: "This is a truly transformational transaction and we look forward to reaping the operational and strategic benefits from the integration. We are also honoured to be partnering with Seadrill through this initiative, and will welcome John Fredriksen to our board after the completion of this transaction. We expect him to add tremendous value to our company."

CIMB Investment Bank, Goldman Sachs and Maybank Investment Bank are advisors to SapuraKencana on the transaction.

About SapuraKencana

SapuraKencana Petroleum Berhad is one of the world's largest integrated oil and gas services and solutions provider based in Malaysia. SapuraKencana's business include providing end-to-end solutions and services to the upstream petroleum industry, and covers activities such as installation of offshore pipelines and structures, fabrication of offshore structures, accommodation and support vessels, drilling vessels, hook-up and commissioning, topside maintenance services, underwater services, offshore geotechnical and geophysical services, project management, diving services, offshore support services, infrastructure and specialized steel fabrication works. With a workforce of over 9,000 people, the Group's global presence can be seen in over 20 countries. Learn more at www.sapurakencana.com.

About Seadrill

Seadrill is a leading offshore deepwater drilling company operating a versatile fleet that can operate in shallow to ultra-deepwater areas in harsh environment and benign environments. Seadrill's fleet includes semi-submersibles, deepwater drillships, jack-ups, semi-tender rigs, and tender rigs. Seadrill has some 7,900 skilled and highly competent employees operating in 15 countries on five continents. Learn more at www.seadrill.com.

About Archer Limited

Archer Limited is a global oilfield service company and an affiliate of Seadrill that specializes in drilling services and well services

This announcement is dated 5 November 2012

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Seadrill Limited via Thomson Reuters ONE

[HUG#1654932]

Seadrill

+47 51 30 99 00

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

IoT & Smart Cities Stories
Cloud-enabled transformation has evolved from cost saving measure to business innovation strategy -- one that combines the cloud with cognitive capabilities to drive market disruption. Learn how you can achieve the insight and agility you need to gain a competitive advantage. Industry-acclaimed CTO and cloud expert, Shankar Kalyana presents. Only the most exceptional IBMers are appointed with the rare distinction of IBM Fellow, the highest technical honor in the company. Shankar has also receive...
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER gives detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPOalso offers sp...
Headquartered in Plainsboro, NJ, Synametrics Technologies has provided IT professionals and computer systems developers since 1997. Based on the success of their initial product offerings (WinSQL and DeltaCopy), the company continues to create and hone innovative products that help its customers get more from their computer applications, databases and infrastructure. To date, over one million users around the world have chosen Synametrics solutions to help power their accelerated business or per...
DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
@DevOpsSummit at Cloud Expo, taking place November 12-13 in New York City, NY, is co-located with 22nd international CloudEXPO | first international DXWorldEXPO and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time t...
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...
Charles Araujo is an industry analyst, internationally recognized authority on the Digital Enterprise and author of The Quantum Age of IT: Why Everything You Know About IT is About to Change. As Principal Analyst with Intellyx, he writes, speaks and advises organizations on how to navigate through this time of disruption. He is also the founder of The Institute for Digital Transformation and a sought after keynote speaker. He has been a regular contributor to both InformationWeek and CIO Insight...
Digital Transformation is much more than a buzzword. The radical shift to digital mechanisms for almost every process is evident across all industries and verticals. This is often especially true in financial services, where the legacy environment is many times unable to keep up with the rapidly shifting demands of the consumer. The constant pressure to provide complete, omnichannel delivery of customer-facing solutions to meet both regulatory and customer demands is putting enormous pressure on...
Machine learning has taken residence at our cities' cores and now we can finally have "smart cities." Cities are a collection of buildings made to provide the structure and safety necessary for people to function, create and survive. Buildings are a pool of ever-changing performance data from large automated systems such as heating and cooling to the people that live and work within them. Through machine learning, buildings can optimize performance, reduce costs, and improve occupant comfort by ...
SYS-CON Events announced today that IoT Global Network has been named “Media Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. The IoT Global Network is a platform where you can connect with industry experts and network across the IoT community to build the successful IoT business of the future.