Offshore drilling contractor Awilco Drilling is wanting into methods to finance its remaining commitments for a newbuild rig ordered at Keppel protecting in thoughts that there’s additionally an choice to delay the supply and the subsequent cost by as much as a 12 months.
Awilco owns and operates two semi-submersible drilling rigs.
During the second quarter of 2020, Awilco’s WilPhoenix rig began operations for Petrofac on the Rubie and Renee location the place it remained till after the top of the quarter.
The rig’s income effectivity in 2Q 2020 was 100 per cent and contract utilisation was 68.1 per cent.
Awilco’s different rig, WilHunter, has been chilly stacked in Invergordon for years now.
Awilco has additionally had two rigs on order at Keppel’s shipyard.
However, Awilco cancelled the development contract for the primary rig, the Nordic Winter, final June because of alleged breaches beneath the contract.
Keppel denied these allegations and the businesses began the arbitration course of to resolve the dispute in June.
When it involves the second rig, the Nordic Spring, Awilco stated on Wednesday that the primary metal for the rig was lower in 3Q 2019. The keel-laying ceremony was held on 31 July in Nantong, China.
According to Awilco, the scenario on the yard in Singapore is unsure because of Covid-19. There is delay in building however the yard is unable to quantify this till the Covid-19 scenario is beneath management and work is absolutely resumed in Singapore.
The rig is scheduled for supply in March 2022.
Remaining capital dedication on the finish of the second quarter in respect of this rig was $382.three million.
Awilco is exploring all viable financing options for the financing of the rig.
Awilco had a money stability on the finish of the second quarter of $16.7 million. It is recognised that the development contracts with the shipyard are structured such that there isn’t a recourse to the remainder of the Group within the occasion of default by the contracting subsidiaries.
The subsequent cost to the yard for the Nordic Spring rig is approx. $42 million and it’s scheduled for March 2021.
Funding for the second instalment and the remaining stability at supply will probably be required, by a mixture of further fairness and debt.
There can be the choice to defer the supply of the rig, and the associated cost, by as much as one 12 months.
Awilco famous that this resolution will probably be taken at a later date.
More purple ink for Awilco
Awilco Drilling additionally on Wednesday reported a complete complete loss for the second quarter of 2020 of $four.6 million in comparison with a lack of $392,000 in the identical interval final 12 months.
Revenue earned within the second quarter was $6.four million in comparison with revenues of $10.four million in 2Q 2019.
Contract backlog on the finish of 2Q was roughly $19.four million in comparison with $13.eight million in 1Q.
Further rig retirements and chilly stacking within the quarter lowered marketed floater provide throughout NW Europe.
Looking forward, whereas the UK demand in 2021 is predicted to stay seasonal, the affect of lowered provide and elevated operator deal with P&A suggests a tighter provide/demand stability and lowered seasonality from Q1/2 2022, Awilco stated.
The Norwegian tax incentive program has had a direct constructive affect on venture sanctions and is predicted to proceed to assist and speed up rig demand in Norway.
Recent fixture ranges within the higher a part of that market point out a level of resilience to short-term market fluctuations, Awilco concluded.
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