Ocean Rig, a spin-off from Economou’s listed DryShips, now has 11 UDW drilling units – two semi submersible drilling rigs and nine UDW drillships including four under construction and are now delivering.
In a market update released 4 September, Ocean Rig confirmed recently took delivery of the UDW, Ocean Rig Mylos, the first of its four 7th generation units from SHI.
The drillship is currently mobilising to offshore Brazil and is expected to commence drilling operations under the 3-year drilling contract with Repsol Sinopec Brasil in November.
Two more UDWs, Ocean Rig Skyros and Ocean Rig Athena, will hit the water this year with the fourth, Ocean Rig Apollo, due in 2015. The newest addition is also due to be handed over by the end of 2015. The option at a fixed priced is declarable by November for delivery in the first quarter of 2016.
Economou, chairman and ceo of both DryShips and Ocean Rig, said: "We have taken advantage of our strong balance sheet and our long-term relationship with SHI to order at a very attractive price an additional newbuild drillship, sistership to our existing 7th generation ultra deepwater drillships." He said the new drillship is expected to be financed through a combination of available cash and debt to be secured prior to the delivery.
Economou said: "With all of our 2013 newbuild drillships as well as our first 2015 newbuild drillship, the Ocean Rig Apollo, already contracted to investment grade counter-parties, we are setting the stage for moderate growth going forward.”
He added: “We believe the ultra-deepwater drilling market for high quality assets will remain strong in the foreseeable future and are excited about the future employment prospects of our high quality homogeneous fleet."
Supporting Economou’s “strong balance sheet’ comment was confirmation Ocean Rig has amended a $1.35bn secured loan facility, modifying the previous restriction on dividend of up to 50% of the previous year’s net income.
“The restriction will now apply on a cumulative basis from 1 July 2013 onwards (50% of cumulative net income and 100% of cumulative losses) and include a carve-out to pay additional dividends up to the higher of (i) $150m and (ii) 5% of the Ocean Rig's net tangible assets,” explained Ocean Rig said.
Financial services group Cowen & Company’s vp, JB Lowe and md James Crandell believe “Ocean Rig is on the verge of significant operational and corporate changes that should take the stock to the next level”.
Ocean Rig also announced Lukoil has exercised options to keep the semi-submersible drilling rig Eirik Raude for an additional two wells. The revised drilling contract is for a firm six-well programme which will keep the rig busy until December 2014.
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