SDLP - Seadrill Partners LLC agrees to acquire the ultra-deepwater drillship the West Auriga
March 11 2014 - 4:30PM
London, United
Kingdom, March 11, 2014 - Seadrill Partners LLC (NYSE:
SDLP) (the "Company") announced today that it has entered into an
agreement with Seadrill Limited ("Seadrill") pursuant to which
Seadrill Capricorn Holdings LLC, the Company's 51% owned subsidiary
("Capricorn Holdings"), will acquire all of the ownership interests
in the entities that own and operate the drillship, the West Auriga (the "Auriga Acquisition") from Seadrill.
The Auriga Acquisition, which is expected to close within 30 days,
will be accomplished through a series of purchases, contributions
and assumptions of debt and is subject to the satisfaction of
certain closing conditions.
The West
Auriga
The West
Auriga is a 6th generation, dynamically positioned drillship
delivered from the Samsung shipyard to its current customer, BP, in
October 2013. The West Auriga is
expected to carry out operations in the U.S. Gulf of Mexico until
the end of its contract in October 2020 at a dayrate of $565,000
per day, excluding approximately $37,500 per day payable by the
customer over the term of the contract relating to mobilization,
variation orders and other special and standby rates.
The implied purchase price of the
Auriga Acquisition is $1.24 billion, less $443.1 million
outstanding under the facility related to the West Auriga. In addition, Capricorn Holdings
intends to issue a $100 million zero coupon limited recourse
discount note to Seadrill that matures in September 2015.
Upon maturity of such note, Seadrill Capricorn Holdings LLC
will repay US$103.7 million to Seadrill. Based on the
Company's 51% ownership of Seadrill Capricorn Holdings, its portion
of the net purchase price after debt will be $355.4 million.
Board
Approval
The Board of Directors of the Company
(the "Board") and the Conflicts Committee of the Board (the
"Conflicts Committee") have approved the terms and conditions of
the Auriga Acquisition. The Conflicts Committee retained a
financial advisor, Global Hunter Securities, to assist with its
evaluation of the Auriga Acquisition.
As a result of the Auriga
Acquisition, the Company's management intends to recommend to the
Board an increase in quarterly cash distributions of between
$0.0325 and $0.0375 per unit (or an annualized increase of between
$0.13 and $0.15 per unit), which would become effective for the
distribution with respect to the quarter ending June 30, 2014.
Although the quarterly cash distribution for the quarter ending
March 31, 2014 has not been declared by our Board, the Company's
management has recommended to the Board a distribution of between
$0.50 to $0.5125 per unit for the quarter.
Any increase in our cash
distributions with respect to the quarter ending June 30, 2014
would be conditioned upon, among other things, the closing of the
Auriga Acquisition, the approval of such increase by our Board and
the absence of any material adverse developments or potentially
attractive opportunities that would make such an increase
inadvisable.
The Board is pleased that the Company
has entered into this acquisition agreement with respect to its
fifth acquisition since the Company's initial public offering in
October 2012. This acquisition will increase the Company's asset
diversification and therefore should further reduce earnings
volatility. As with the Company's acquisitions of the
T-15, T-16, the West Sirius and the
West Leo, this acquisition is expected to be
an accretive transaction and is consistent with the Company's
growth strategy. The Board believes that the fundamental
long-term outlook for the offshore drilling industry remains
strong, and is positive about the Company's future growth
prospects.
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. In particular,
statements regarding the Company's ability to complete the Auriga
Acquisition, its financing of the Auriga Acquisition and projected
increases in cash distributions are considered forward looking
statements. 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, 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, 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 Annual
Report on Form 20-F (File No. 001-35704). 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 the
Company to predict all of these factors. Further, the Company
cannot assess the impact of each such factor 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.
March 11, 2014
Questions should be directed
to:
Graham Robjohns: Chief Executive Officer
Rune Magnus Lundetræ: Chief Financial Officer
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Seadrill Partners LLC via Globenewswire
HUG#1768086
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