Polarcus, Sovcomflot ink vessel deal

Polarcus has signed a heads of agreement with Russia's SCF GEO AS (Sovcomflot) to charter a vessel on bareboat terms with delivery scheduled for March 2017, a deal that comes with an option for Sovcomflot to buy the vessel.

Image of the Polarcus Nadia, from Polarcus.

The fixed period of the charter will be five and a half years with options to extend for up to four additional months.

The vessel will be delivered without streamers and the streamer package currently on board the vessel will be available for use across the Polarcus fleet. The charter will generate minimum hire of US$72 million over the fixed charter period with the possibility of increased charter hire fees based on Sovcomflot benefitting from certain market improvements. Sovcomflot will have the right to purchase the vessel at any time during the charter at pre-agreed prices.

The heads of agreement and the charter are subject to the consent of the bank lenders who have mortgagee rights over the vessel. The charter is also subject to finalizing terms with Sovcomflot.

"Securing this long-term revenue stream is testament to the company's ability to adapt to the current environment. As well as strengthening Polarcus' backlog and cash flow profile, this vessel commitment generates healthy tension in our current vessel schedule," Duncan Eley, Group COO said.

With this agreement, the Polarcus Group reinforces its collaboration with a strategic client and now has two vessels on long-term charter, both built to operate in environmentally-sensitive sea areas including high ice class conditions.

Polarcus is a seven-vessel marine geophysical company. Following delivery of the vessel to Sovcomflot, the Polarcus Group will have two vessels on long-term bareboat charter with a total fixed backlog of $110 million with no associated operating costs. In addition, the Polarcus Group operates a fleet of four vessels in the contract market for which the current backlog amounts to $115 million. The company also has Polarcus Nadia, currently cold-stacked, which will be considered for re-activation on improved market conditions. The available excess streamer package will reduce re-activation costs significantly if installed on Polarcus Nadia.