Sold! The Songa Eclipse is Heading to Seadrill

Songa Eclipse, image courtesy Sembcorp Marine

Songa Offshore officially announced the sale of the ultra deepwater semi-submersible drilling rig Songa Eclipse to Seadrill for a net price of USD $590 million.

On Oct 22nd, Songa announced they had reached a “Heads of Agreement” for the potential sale of this rig and today the plan has been finalized between the two drilling contractors. This rig has had a fairly colorful history over the past year suffering a fair bit of down time due to “labor issues“. Songa’s latest rig status report mentioned an utterly dreadful operating efficiency of 68% for the month of October, but continued by saying that, “these issues were solved by the end of the month and this far in November the rig has had an operation efficiency of 100% continuing its contract with Total E&P Angola.”

After repayment of debt, the net cash effect from the sale proceeds will be approximately USD 280 million, delivery is expected to take place during December 2012.

The rig is currently operating for Total offshore Angola on a fixed contract ending in December 2013. Total has three one-year options to further extend the contract which will be assumed by Seadrill upon delivery.

Fredrik Halvorsen, Chief Executive Officer of Seadrill Management AS says, “This investment is in line with our strategy of building a modern fleet through selective acquisitions and organic growth. The ultra-deepwater market is in a strong cycle, something we expect to prevail over the coming years and the acquisition increases our exposure to this segment. Furthermore, we are pleased to strengthen our relationship with Total in Angola, and increase our presence in the region, which adds scale to our operations and could further reduce our relative cost base in the region.”

Songa Eclipse is of the same design, Friede & Goldman ExD millenium, as four of Seadrill’s existing rigs in operation, West Sirius, West Taurus, West Orion and West Capricorn. The rig is dynamically positioned (DP 2 class certification) and equipped with Aker Solutions drilling equipment and have water depth capability up to 10,000ft and drilling depth capacity of up to 37,500ft. The subsea well control system includes a six-ram 15K psi BOP stack.