Northern Drilling Ltd, a newcomer in the offshore drilling space, has exercised its option to buy the semi-submersible rig Bollsta Dolphin for $400 million.
The Bollsta Dolphin is capable of operating in harsh environment areas and in ultra deep waters of up to 10,000 feet. The rig is currently under construction at Hyundai Heavy Industries Co. Ltd (“HHI”) with expected delivery in January 2019.
The company has the option to take earlier delivery of the rig should favorable contracts with start-up prior to January 2019 be secured, Northern Drilling said.
NODL will make a pre-delivery instalment of $200 million with the remaining balance due at delivery. The Company will consider financing the take-out instalment with debt subject to market fundamentals and contracts secured.
Northern Drilling is an offshore drilling contractor formed by a Norwegian-born billionaire and drilling and shipping magnate John Fredriksen in March 2017 targeting distressed drilling rig acquisitions.
The company currently owns one semi-submersible rig – the West Mira- and has now exercised the option it had for the Bollsta Dolphin.
Fredriksen, whose net worth has been estimated to more that $10 billion in 2017 , through Northern Drilling bought the West Mira rig from Hyundai Heavy Industries after Seadrill had canceled the contract due to the yard’s inability to deliver the rig on time.
It’s a similar case with the Bollsta Dolphin. The original client for the rig, Fred. Olsen Energy, canceled the order as a result of the delays in delivery date.
Commenting on the new addition to the fleet – the Bollsta Dolphin – the company said:”The market for harsh environment capable rigs continues to show clear signs of improvement and stands out favorably in the drilling industry with higher utilization and better contract economics.
“This has resulted in increased interest from several parties to acquire similar stranded harsh environment rigs at increasing prices. The company therefore expects asset transactions to be concluded at prices that have a clear positive read-through for the company’s fleet.”
“The company will continue to pursue its strategy of opportunistically acquiring distressed drilling assets, including rigs for shallow and benign operations, balancing opportunism with commercial discipline,” Northern Drilling said on Wednesday afternoon.