SDLP - Seadrill Partners LLC agrees to acquire the ultra-deepwater drillship the West Polaris
June 17 2015 - 7:48AM
London, United Kingdom, June 17, 2015 -
Seadrill Partners LLC (NYSE: SDLP) (the "Company" or "Seadrill
Partners") announced today that Seadrill Operating LP, the
Company's 58% owned subsidiary ("Seadrill Operating"), has entered
into an agreement with Seadrill Limited ("Seadrill") pursuant to
which Seadrill Operating will acquire all of the shares of Seadrill
Polaris Ltd. ("Seadrill Polaris"), the entity that owns and
operates the drillship, the West Polaris (the "Polaris
Acquisition") from Seadrill. The Polaris Acquisition is expected to
close within 7 days.
The West Polaris is a 6th generation,
dynamically positioned drillship delivered from the Samsung
shipyard in 2008. The West Polaris is expected to carry out
operations in Angola until the end of its contract with ExxonMobil
in March 2018.
The total consideration for the Polaris
Acquisition is comprised of $204 million in cash and $336 million
of debt outstanding under the existing facility financing the West
Polaris. Seadrill Operating will fund the balance of the purchase
price with a seller's credit of $50 million due in 2021 that
carries an interest rate of 6.5% per annum.
The West Polaris is currently
contracted with ExxonMobil on a daily rate of $653,000. Under the
terms of the acquisition agreement, Seadrill Polaris has agreed to
pay Seadrill any dayrate it receives in excess of $450,000 per day,
adjusted for daily utilization, for the remainder of the ExxonMobil
contract. By effectively lowering the dayrate Seadrill Polaris
receives to $450,000 per day, the Company has reduced the
acquisition cost and its re-contracting risk.
As part of the acquisition agreement,
the Company's obligation to repay the $50 million seller's credit
due to Seadrill will be reduced if the average contracted dayrate
under any replacement contract is below $450,000 until the seller's
credit's maturity in 2021. The amount of seller's credit due
will be reduced until Seadrill Partners' effective dayrate is
$450,000 or until the seller's credit is reduced to zero.
Should the average dayrate of the replacement contract be
above $450,000, the entire $50 million seller's credit must be paid
to Seadrill upon maturity of the seller's credit in 2021.
Additionally as part of the acquisition
agreement, Seadrill Polaris has agreed to pay Seadrill 50% of any
dayrate above $450,000 per day, adjusted for daily utilization,
after the conclusion of the existing contract until 2025.
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 Polaris Acquisition. The Conflicts Committee retained a
financial advisor to assist with its evaluation of the Polaris
Acquisition.
The Board is pleased that the Company
has entered into the acquisition agreement with respect to the West
Polaris. While the Board believes that the Polaris Acquisition is
accretive, the Board does not intend to increase distributions to
unitholders based on this transaction. The Polaris Acquisition is
intended to reduce risk by increasing the Company's distribution
coverage, asset diversification and revenue backlog.
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 Polaris
Acquisition and thereby increase its distribution coverage, asset
diversification and revenue backlog 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 Securities and Exchange
Commission, 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.
June 17, 2015
Questions should be directed to:
Graham Robjohns: Chief Executive
Officer
John T. Roche: 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#1929189
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