Smedvig News

Ole Sanne has accepted the new position of CCO at Ocean Installer, and Jim Dåtland will join Ocean Installer as the new CFO. Mr. Sanne and Mr. Dåtland enter their new positions mid-February 2013. Mr. Sanne has been with Ocean Installer since the company’s inception and has more than 15 years of experience from the subsea sector, of which 12 years in senior managerial positions, including as Finance and Company Director for Subsea 7 Norway. Mr. Dåtland has spent the last seven years with the offshore drilling contractor Seadrill Limited focusing on investor relations and corporate finance activities. Seadrill has grown to become the world`s largest driller by market capitalization and enterprise value.

E-navigation company NAVTOR said that Tor A. Svanes, the founder of C-MAP Norway, has joined the business in the position of Managing Director. Svanes, who is well known within the maritime industry for his contribution to the development of ECDIS and the electronic chart concept, will now lead and develop the NAVTOR team and proposition. Stavanger-based Smedvig established NAVTOR in June 2011 after the firm spotted an emerging opportunity in the maritime marketplace. As carriage requirements for ENCs moved towards an official IMO mandate, Smedvig saw an opening to build up an e-navigation company that could meet the new demand for digital navigational services.

Endeavour International Corporation has signed an agreement with the Smedvig Family Office of Norway for a current investment of $40 million (USD: 75.43, -0.30, -0.39%) and with the intent to increase that investment to a total of $100 million (USD: 75.43, -0.30, -0.39%) in the future to support the strategic activities of Endeavour. This investment will take the form of a convertible note and is expected to close in mid-January upon completion of required consents and approvals. "It is a significant vote of confidence for the Smedvig family to make this investment in our management team and company," said William L. Transier, chairman, president and chief executive officer.

Keppel Hitachi Zosen (KHZ) has delivered a Semi-Submersible Self-Erecting Tender Rig (SSETR) to Smedvig Asia Ltd (Smedvig). The SSETR was named West Alliance by Mrs. Patricia Chan, wife of Mr. Chan Heng Wah, Drilling Manager of Esso Production Malaysia Inc, at a naming ceremony held in Keppel Shipyard on September 29, 2001. West Alliance has a one plus one optional year drilling contract with Esso Malaysia, which is scheduled to commence in early November this year. Following the exercise of its option, Smedvig will own 100 per cent of West Alliance, and bring the total capital expenditure of the rig to about $85 million. West Alliance represents the newest generation of SSETRs, incorporating the latest technology and equipment.

Smedvig Asia has exercised its option to purchase Keppel Hitachi Zosen’s (KHZ) interest in the semi-submersible tender rig, West Alliance, for US$61.5 million on November 2, 2001. In mid August this year, Smedvig Asia had announced its intention to purchase KHZ’s stake in the rig once the vessel commences operations. With the exercise of its option, Smedvig Asia now owns 100 percent of West Alliance. West Alliance, now deployed in East Malaysia under a contract with Esso Malaysia, was successfully built and delivered by Keppel Shipyard, a member of the Keppel Group, in October 2001.

Smedvig has been awarded a letter of intent by Total Congo for the self-erecting tender rig T-8. The drilling assignment in Congo, West Africa, has a firm duration of 105 days, with options for an additional 300 days. The estimated contract value for the firm period is US$ 5.1 million. In addition, the contract includes a mobilization/demobilization fee of US$ 4 million. Start-up under the new contract is scheduled for the second quarter 2004, following a five year mandatory survey.

Smedvig has signed an agreement with BP Norge AS to extend the platform drilling contract on the Ula and Valhall fields in the Norwegian sector of the North Sea. years, with option for one additional year. The estimated contract value for the firm period is approximately NOK 300 million. The contract, which is expected to employ some 200 people, includes in the first phase production drilling from the Valhall injection platform and the Valhall drilling platform. Smedvig has been the drilling contractor on the Ula field since production start-up in 1986 and the drilling contract on the Valhall field since 2000. Norwegian continental shelf," says Kjell E. Jacobsen, CEO, Smedvig asa.

Smedvig has signed an agreement with Norsk Hydro to extend the drilling contract for the semi-submersible drilling rig West Venture. The extension of the drilling contract has a firm duration of two years and in addition, annual renewal options for five more years. The estimated contract value for the firm period is US$ 150 million (approximately NOK 1 billion) and includes an incentive scheme related to drilling performance. West Venture is equipped with a dual derrick set allowing for enhanced drilling efficiency. The dual drilling system is especially advantageous in completion of subsea production wells. West Venture has operated…

Smedvig has been awarded a letter of intent by A/S Norske Shell for the assignment of the deepwater drillship West Navigator on the Ormen Lange field in the Norwegian Sea. The assignment includes drilling of eight deepwater wells in approximately 900 meters of water, with options for four additional wells. The contract value for the firm part of the contract is estimated to US$ 167 million (NOK 1.17 billion). The commencement is planned in the second half of 2005. The drilling period for the firm part of the contract is estimated to 740 days, while the option period could have a duration up to one year. The assignment is subject to final government approval of the Ormen Lange project.

The annual General Assembly of The Norwegian Shipowners’ Association has today elected shipowner Johan G. Hvide, Seatrans DA in Bergen, as President for a two years period. Mr. Hvide was unanimously proposed and was elected by acclamation. Elisabeth Grieg from Grieg International AS in Oslo and Trygve Seglem from Knutsen OAS Shipping AS in Haugesund were elected Vice Presidents. President: Johan G. Kjell E.

Smedvig has entered into an agreement with Keppel Shipyard in Singapore for the purpose of building a new semi-submersible self-erecting tender rig (semi-tender). Total capital expenditure for the new semi-tender is estimated at $ 94 million, of which Smedvig's share is approximately $ 29 million. The agreement with Keppel Shipyard is based on the principle that Keppel shall build and own the the semi-submersible hull, and Smedvig shall own the derrick equipment set. Smedvig shall for a period of ten years be responsible for marketing, management and operation of the unit. The agreement includes an option for Smedvig to purchase the semi-submersible hull during the ten-year period at a pre-agreed price.

Keppel FELS Limited has entered into a cooperation agreement with Smedvig Asia Limited (Smedvig Asia) to build a Semisubmersible Drilling Tender (SSDT) with Keppel Offshore & Marine’s proprietary design. Developed by the Deepwater Technology Group (DTG), the KFELS SSDT3600-GOM-C42 will be the fourth vessel in the series of successful SSDTs that have been gainfully deployed in this region. Valued at $94 million, Keppel FELS and Smedvig Asia will own and operate the ultra deepwater semi tender on a 72/28 basis respectively. The newbuild is due for completion in the third quarter of 2005.

The Norwegian Shipowners Association and the Federation of Offshore Workers Unions (OFS) have not succeeded in reaching agreement at arbitration on the annual settlement. This means that the OFS has called out on strike its members on four rigs. As from July 9, the strike will be extended by one more rig. For the time being none of Smedvig's mobile units are affected by the strike. However, if the strike is extended, Smedvig's rigs and/or the Company's activities on fixed platforms in the Norwegian sector may be affected.

In connection with minor repair work the derrick of the drillship, West Navion, it has been uncovered cracks in the wire sheaves in the hoisting system of the dual derrick set (Ram Rig). As a result of the findings, operations on West Navion are temporarily halted. It is expected that the halt will last for another 2-3 weeks before operations are resumed. Maritime Hydraulics, the supplier of the dual derrick set, has issued a request to "All users of Maritime Hydraulics' Ram Rigs" to inspect all drilling units equipped with the dual Ram Rig. Consequently, Smedvig will initiate inspection of the drilling rig West Venture, which is also equipped with the Ram Rig derrick set. West Navion is Contracted to Marathon Oil Company Offshore Canada.

Operations on West Navion, which is currently operating for Marathon Oil offshore Canada, continues to be suspended, due to repair work on the main sheaves in the RamRig derrick. Although the work is near completion, defects were discovered in certain welds in the marine riser during inspection prior to re-commencement of operations. Defects have been discovered both in the risers that have been utilized in operation as well as in new, unutilized risers. The initial estimate of the time necessary to complete the required repair work prior to re-commencement of operations is approximately six weeks. The total off-hire period as a result of the RamRig and marine riser repair work is estimated to approximately eight weeks, prior to the loss of hire insurance taking effect.

Unocal Thailand Ltd. has issued a letter of intent to Smedvig Asia Ltd. for the assignment of the self-erecting tender rig T-4. The production drilling assignment has a duration of five years, and the contract value is estimated at approximately $73 million. The contract includes an incentive arrangement that could increase the contract value. The proposed contract includes early termination provisions after three years against payment of an early termination fee. T-4 is currently working under a drilling contract for Unocal Thailand until mid-December 2002. Thereafter the rig is scheduled for a four months extensive upgrading and classification survey, before it starts up under the new contract in April 2003.

Smedvig has been awarded a letter of intent by Shell U.K. Exploration and Production for a drilling assignment for the fourth-generation semi-submersible drilling rig West Alpha. The contract is for drilling of a HPHT (high-pressure-high-temperature) exploration well in the UK sector of the North Sea. The drilling period is estimated to approximately 110 days, and the contract value is $13 million. Start-up of operations is scheduled for August 2002.

Smedvig reported consolidated operating profit of NOK 161 million for the first quarter as compared to NOK 226 million in the previous quarter. The decrease is primarily attributable to lower utilization of the mobile units. Net financial expenses for the first quarter was NOK 9 million as compared to NOK 68 million in the previous quarter. Net income for the first quarter was NOK 129 million as compared to NOK 144 million in the previous quarter. Earnings per share were NOK 1.57 for the first quarter. Cash flow for the quarter amounted to NOK 225 million. Cash flow per share after minority interests was NOK 2.73. Operating profit from the Mobile Units Division amounted to NOK 23 million as compared to NOK 111 million in the previous quarter.

Smedvig has been awarded a $3.1 million contract by the Dutch oil company Nederlandse Aardolie Maatschappij (NAM) for the assignment of the jack-up drilling rig West Epsilon offshore Holland. The contract is in direct continuation of the current contract with NAM, and the drilling period is estimated to 40 days, lasting until the end of July this year.

The All Share Index in Oslo lost a further 4.2 percent in April, and as in March the main reason for the fall was international repricing of technology stocks. However, shipping and offshore companies were not providing any help for the market, as the Shipping Index fell a solid 5.8 percent during the month. Det Søndenfjeldske (SFJ), Ocean Rig (OCR) and Stolt Comex Seaway (SCS and SCSA) all fell between 14 and 19 percent, leading the way down for offshore stocks. The share price of Det Søndenfjeldske has dropped almost 25 percent during the last two months. Also Smedvig A (SME), Petroleum Geo-Services (PGS) and TGS Nopec (TGS) saw their market values fall in April. The three stocks fell 1.1, 5.4 and 5.7 percent respectively.

The All Share Index in Oslo was up 3.8 percent in May, and shipping and offshore stocks were leading the way as the Shipping Index surged 13.9 percent during the month. All but three of the offshore stocks listed on the OSE experienced positive share price movements in the period. Northern Offshore (NOF), announcing strong results for first quarter, was up all of 50 percent. Nortrans Offshore (NOL), Navis (NIS), Stolt Comex Seaway (SCS) and Smedvig (SME/SMEB) were all up between 33 and 20 percent. Polar Holding (POL) fell 26 percent in May as District Offshore (DOF) failed in it's attempt to acquire the company. Brøvig Offshore was down 17 percent, while DOF fell 3 percent. The two cruise operators both experienced a positive share price development in May.

The All Share Index in Oslo was up 3.8 percent in May, and shipping and offshore stocks were leading the way as the Shipping Index surged 13.9 percent during the month. All but three of the offshore stocks listed on the OSE experienced positive share price movements in the period. Northern Offshore (NOF), announcing strong results for first quarter, was up all of 50 percent. Nortrans Offshore (NOL), Navis (NIS), Stolt Comex Seaway (SCS) and Smedvig (SME/SMEB) were all up between 33 and 20 percent. Polar Holding (POL) fell 26 percent in May as District Offshore (DOF) failed in it's attempt to acquire the company. Brøvig Offshore was down 17 percent, while DOF fell 3 percent. The two cruise operators both experienced a positive share price development in May.

The All Share Index in Oslo was up 3.8 percent in May, and shipping and offshore stocks were leading the way as the Shipping Index surged 13.9 percent during the month. All but three of the offshore stocks listed on the OSE experienced positive share price movements in the period. Northern Offshore (NOF), announcing strong results for first quarter, was up all of 50 percent. Nortrans Offshore (NOL), Navis (NIS), Stolt Comex Seaway (SCS) and Smedvig (SME/SMEB) were all up between 33 and 20 percent. Polar Holding (POL) fell 26 percent in May as District Offshore (DOF) failed in it's attempt to acquire the company. Brøvig Offshore was down 17 percent, while DOF fell 3 percent. The two cruise operators both experienced a positive share price development in May.