SDRL - Seadrill Limited agrees to sell the ultra-deepwater drillship the West Vela to Seadrill Partners
Hamilton, Bermuda, November 4, 2014 - Seadrill Limited (NYSE: SDRL) ("Seadrill" or the "Company") announced today that it has entered into an agreement with Seadrill Partners pursuant to which the Company will sell to Seadrill Capricorn Holdings LLC, Seadrill Partners' 51% owned subsidiary ("Capricorn Holdings"), all of the ownership interests in the entities that own and operate the drillship, the West Vela (the "Vela Acquisition"). The Vela Acquisition, which is expected to close within 3 days, will be accomplished through a series of purchases, contributions and assumption of debt.
The West Vela
The West Vela is a 6th generation, dynamically positioned drillship delivered from the Samsung shipyard to its current customer, BP, in November 2013. The West Vela is expected to carry out operations in the U.S. Gulf of Mexico until the end of its contract in November 2020.
The implied purchase price of the Vela Acquisition is $900 million, less $433 million of debt outstanding under the existing facility financing the West Vela. Based on Seadrill Partners' 51% ownership of Capricorn Holdings, its portion of the net purchase price after debt will be $238 million.
Under the terms of the West Vela contract BP is paying a daily rate of $565,000 per day plus approximately $44,000 per day as a mobilization fee paid over the term of the contract. Under the terms of the acquisition agreement Capricorn Holdings will pay Seadrill $40,000 per day of day rate revenue actually received as well as the $44,000 per day mobilization fee. Both payments will cease at the end of the current contract.
FORWARD LOOKING STATEMENTS
This news release includes forward looking statements. Such statements are generally not historical in nature, and specifically include statements about the Company's plans, strategies, business prospects, changes and trends in its business and the markets in which it operates. These statements are made based upon management's current plans, expectations, assumptions and beliefs concerning future events impacting the Company and therefore involve a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, which speak only as of the date of this news release. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to offshore drilling market conditions, contract backlog, dry-docking and other costs of maintenance of the drilling rigs in the Company's fleet, the cost and timing of shipyard and other capital projects, the performance of the drilling rigs in the Company's fleet, delay in payment or disputes with customers, fluctuations in the international price of oil, international financial market conditions including the international financial crisis, changes in governmental regulations that affect the Company or the operations of the Company's fleet, increased competition in the offshore drilling industry, and general economic, political and business conditions globally. Consequently, no forward-looking statement can be guaranteed. When considering these forward-looking statements, you should keep in mind the risks described from time to time in the Company's filings with the SEC, including its Registration Statement on Form 20-F. The Company undertakes no obligation to update any forward looking statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, the Company cannot assess the impact of each such factors on its business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward looking statement.
November 4, 2014
Questions should be directed to:
Rune Magnus Lundetræ: Chief Financial Officer