Hamilton: John Fredriksen has made some extra cash for his firm Seadrill Limited by selling the West Polaris drillship to Seadrill Operating, a subsidiary of Fredriksen spin-off, Seadrill Partners. The 2008-built Samsung Heavy built drillship has a charter at a daily rate of $653,000 with ExxonMobil in Angola through to March 2018.
The sale is for $204m in cash and $336m 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 $50m due in 2021 that carries an interest rate of 6.5% per annum.
Under the terms of the acquisition agreement, Seadrill will receive any dayrate in excess of $450,000 per day, adjusted for daily utilisation, for the remainder of the ExxonMobil contract, giving Seadrill an estimated $60m in cash per year through the remainder of the ExxonMobil contract.
Additionally, following the conclusion of the current contract, Seadrill will continue to have a degree of exposure to future dayrates by sharing revenues above $450,000 per day with Seadrill Partners, again without the associated operating expense.