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SFL Corporation Ltd. announces that it has entered into forbearance agreements with Seadrill Limited (“Seadrill”) in respect of the leasing arrangements on its three drilling rigs and the corresponding financing agreements. Unless extended or terminated, these forbearance agreements will last until December 14, 2020 (the “forbearance period”).
In addition, Seadrill has also announced that it has agreed to renew its forbearance agreements with certain other creditors in respect of its senior secured credit facility agreements, senior secured notes, and its guarantee facility agreement, in order to allow more time to negotiate a comprehensive restructuring of its balance sheet. Seadrill has advised that such a restructuring may involve the use of a court-supervised insolvency process.
While the discussions with Seadrill and its stakeholders are ongoing, the harsh environment jack-up rig West Linus and the harsh environment semi-submersible rig West Hercules remain on their respective drilling-contracts from Seadrill to oil majors in the North Sea. The semi-submersible rig West Taurus has been held in layup by the lessee for more than five years.
As previously publicly announced, Seadrill’s failure to pay hire under the leases for our three drilling rigs when due in October and November constituted an event of default under such leases and the related financing agreements. Unless cured or waived, an event of default under the lease agreements or the related financing agreements could result in enforcement by us or the applicable secured lenders (as applicable). In order to reduce the risk of such a scenario, SFL has entered into forbearance agreements with these lenders on the same terms as Seadrill’s forbearance agreements with these lenders.
During the forbearance period, Seadrill will be allowed to use certain funds received from the charterers of certain rigs to pay operating expenses for such rigs, from October until the end of the forbearance period. In exchange, SFL will receive approximately 67 – 70% of the existing contracted lease hire related to the West Hercules and the West Linus, respectively, for the same period. This is essentially equivalent to the interest and amortization due on the secured bank loan facilities relating to these rigs. Any excess hire paid under the above referenced leases will remain in Seadrill’s earnings accounts pledged to SFL.
While no assurances can be provided with regards to the outcome of the Seadrill restructuring, SFL continues to have constructive dialogue with Seadrill and the relevant financing banks to find a long-term solution.
Source: SFL Corporation
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Valaris Limited announced new contracts awarded subsequent to issuing the Company’s most recent fleet status report on February 21, 2023. Three-year contract with Petrobras for drillship VALARIS DS-8. The rig will be reactivated for this contract. The total contract value is approximately $500 million, including a $30 million mobilization fee. 100-day contract with a TotalEnergies affiliate for drillship VALARIS DS-12. The contract is expected to commence in second quarter 2023. 70-day contract with Beach Energy offshore New Zealand for heavy duty modern jackup VALARIS 107. The contract is expected to commence in third quarter 2023. The total contract value is approximately $26 million. President and Chief Executive Officer Anton Dibowitz said, “We are particularly pleased to have secured the award for preservation stacked drillship VALARIS DS-8, for a contract that is expected to generate a meaningful return over the firm contract term, and we remain focused on exercising our operational leverage in a disciplined manner. This most recent award represents the sixth contract awarded to one of our high-quality stacked floaters since mid-2021, and speaks volumes about our demonstrated track record of project execution when reactivating rigs.” Dibowitz added, “Following the reactivation of VALARIS DS-17 and DS-8, we will have ten floaters working across the golden triangle, including four drillships in Brazil, a market where we expect to see continued growth over the next several years.” Updated Guidance As a result of the contract awarded to VALARIS DS-8, which will require the rig to be reactivated from preservation stack, we are updating our first quarter 2023 and full-year 2023 guidance provided on our fourth quarter 2022 conference call on February 21, 2023. First Quarter 2023 Contract drilling expense is expected to increase by approximately $5 million to $385 million to $395 million. Adjusted EBITDA is expected to decrease by approximately $5 million to negative $5 million to breakeven. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $25 million to $30 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Full-Year 2023 Revenues are anticipated to be $1.8 billion to $1.9 billion, unchanged from the guidance provided on our fourth quarter 2022 conference call. Contract drilling expense is expected to increase by approximately $60 million to $1.49 billion to $1.59 billion. Adjusted EBITDA is expected to decrease by approximately $60 million to $180 million to $220 million. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $280 million to $320 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Capital expenditures are expected to increase by $60 million to $320 million to $360 million. Source: Valaris Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Seadrill Limited announced that the West Neptune has executed approximately six months of term extensions with LLOG Exploration Offshore, L.L.C in the US Gulf of Mexico. The extensions will commence in direct continuation of the existing term, and will keep the rig busy until Q3 2024, furthering Seadrill and LLOG’s long-term association. Total contract value for the extension is approximately $79 million. Source: Seadrill Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Semisub rig owner Dolphin Drilling has inked a new contract with Peak Petroleum in Nigeria for its 1974-built Blackford Dolphin. The firm contract, which follows the letter of award in January, gives the Euronext Growth-listed owner of three rigs the potential to extend the unit’s backlog by a minimum of 120 days and up to 485 days. The deal adds to and will be a direct continuation of the previously announced 12-month contract with General Hydrocarbon Limited (GHL). Øystein Stray Spetalen-backed company said the effective dayrate associated with the minimum firm period of the contract is $325,000, including the mobilisation fee. “The final award of the contract for Blackford Dolphin shows the opportunities in Nigeria at a strong dayrate, in addition to building on the backlog for the rig. It also underlines the attractiveness of our assets, and we look forward to returning to revenue-generating operations in 2023,” noted Bjørnar Iversen, CEO of Dolphin Drilling. Source: Dolphin Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
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