Vantage Drilling Company has signed a definitive agreement to acquire the rights and obligations under the construction contract for the ultra-deepwater drillship known as Dragonquest from Valencia Drilling Corporation, a Marshall Islands corporation for a purchase price of approximately $164 million.
Upon closing of this transaction the Company will be responsible for funding the remaining construction-related payments for the Dragonquest. In addition, Vantage has agreed to pay up to $5 million of Valencia’s costs and expenses at closing. The closing of the acquisition is subject to specified closing conditions.
The Dragonquest was constructed at Daewoo Shipbuilding & Marine Engineering Co., Ltd. (“DSME”) in Okpo, Korea. Construction has been completed on the vessel, and upon delivery of the Dragonquest and the closing of the transaction, Vantage will be required to make expenditures for the final construction payment, project costs, equipment, and spares, and the total delivered, in-service cost of the project, including the purchase price under the agreement with Valencia, totaling approximately $800 million. The closing of the transaction and the delivery of the Dragonquest are currently expected to take place in April 2012.
Paul A. Bragg, the Company’s Chairman and CEO, commented, “We are excited to acquire the Dragonquest as we continue to build one of the most modern and technologically advanced offshore drilling fleets in the world, and expect to complete the acquisition and take delivery of the rig in the coming weeks.
“We have managed the project since its inception in 2008, so we have the highest confidence in the quality and capabilities of the asset we are buying.”
Upon delivery, the Dragonquest is expected to be deployed in the U.S. Gulf of Mexico, pursuant to an eight-year contract with Petrobras. Bragg continued, “Beginning in the third quarter of 2012, we expect the Dragonquest to generate $140 to $150 million of EBITDA per year or approximately $1.2 billion over the life of this contract.”
The Dragonquest is equipped for drilling in water depths of up to 10,000 feet, with a total vertical drilling depth capacity of up to 40,000 feet. The Dragonquest’s hull design has a variable deck load of approximately 20,000 tons and measures 781 feet long by 137 feet wide.,
[mappress] Source: Vantage Drilling, March 20, 2012