UK-based offshore drilling company Awilco Drilling has completed the sale of its WilPhoenix semi-submersible drilling rig to P&A specialist to Well-Safe Solutions.
The proposed sale was first announced early in May, when Oslo-listed Awilco Drilling said the rig would be sold for $15.5 million.
The WilPhoenix is one of Awilco Drilling's two Enhanced Pacesetter semi-submersible drilling rigs. It was built in 1982 and upgraded in 2011. WilHunter, Awilco Drilling’s other semi-submersible, is in the process of being sold for recycling.
With these sales, Awilco Drilling will no longer own any drilling rigs.
Loan redeemed
Awilco Drilling had in May signed a short-term shareholder loan with Awilhelmsen Offshore AS and QVT Family Office Fund LP, to be used for general working capital purposes.
The loan was for a total of up to USD 4 million, structured as a draw-down facility, with an interest rate of 10 percent per year on the aggregated outstanding principal amount. In addition, there was an arrangement fee of 2 percent on the total amount. The maturity date for the loan was July 1, 2022.
With the sale of WilPhoenix, the short-term shareholder loan with Awilhelmsen Offshore AS and QVT Family Office Fund LP has been redeemed.
Conversion to P&A Unit
As for the buyer of the WilPhoenix, Well-Safe Solutions, this will be the second semi-submersible rig in its fleet after the company in 2019 bought the Ocean Guardian semisubmersible drilling unit from Diamond Offshore, and converted it into a plugging and abandonment rig.
Well-Safe Solutions has confirmed that the WilPhoenix - to be renamed Well-Safe Defender - will be optimized for future well plug and abandonment (P&A) activity, too.
According to the offshore well-decommissioning company, the WilPhoenix acquisition is expected to create around 100 jobs in a variety of onshore and offshore roles, in addition to the 231 personnel already employed by Well-Safe Solutions.
The WilPhoenix is expected to enter service with Well-Safe Solutions as the Well-Safe Defender in late 2022.
Arbitration
Following the agreements to sell both of its rigs, Awilco's principal activity is to continue the arbitration processes with Keppel FELS shipyard.
Awilco Drilling had planned to upgrade its fleet with a couple of 7-gen semi-subs, Nordic Winter and Nordic Spring, ordered from Keppel in 2018 and 2019, and targeted for the Norwegian market.
The orders have since been canceled, and Keppel and Awilco are currently involved in arbitration cases over the order cancellations.
Offshore drilling contractor Dolphin Drilling last year secured the marketing rights for two KFELS Moss Maritime CS60 ECO MW semi-submersible drilling rigs originally ordered by Awilco.
In a recently released annual report, Awilco Drilling said: "Although the main focus in the short term will be on the arbitration processes, minimizing costs and thereby maximizing returns to the shareholders, the Company shall also continue to evaluate new investment opportunities. If an attractive opportunity arises, which complements the Company’s financial and operational aspirations, operations will resume once again."
Keppel FELS is seeking to redeem from Awilco's subsidiaries $424.9 million for the first rig, and $268.9 million for the second, the claims that Awilco strongly denies.
"It is expected that the final arbitration outcome for Awilco Rig 1 Pte Ltd, including any appeal process, will be no earlier than Q4 2022. The arbitration process for Awilco Rig 2 Pte Ltd, was started six months later and also expected no earlier than Q4 2022," Awilco Drilling said recently.
Awilco is seeking from Keppel a total amount of $97.7 million.
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