January 8, 2006
Scorpion plans fifth jackup at AmFELS
Scorpion Offshore plans to exercise an option to construct its fifth LeTourneau Super 116 jack-up drilling rig at Keppel AmFELS in Brownsville, Texas.
To meet the down payment requirements of the shipyard and equipment suppliers, the company--which is listed on the Oslo Stock Exchange under the ticker symbol SCORE--plans to raise up to $ 25 million through the private placement of additional authorized shares at market price.
On December 5, 2005, the company procured an option from AmFELS to construct Rig No. 5 which has a projected delivery in November 2008. This option, which is valid until January 18, 2006, requires that Scorpion pay AmFELS US$13 million prior to this date. On December 27, 2005 Scorpion exercised its outstanding option to purchase a "kit: comprised of the legs, jacking system and cranes for a Super 116C from LeTourneau Inc. Scorpion intends to use this "kit in the construction of its fifth rig, which will be named the "Offshore Intrepid". No further payments are due to either AmFELS or LeTourneau on the Offshore Intrepid until the first quarter of 2007.
The company plans to raise the new funds as soon as possible, but, in any event, before January 18, 2006. Proceeds will be used to make down payments to the shipyard, and to the providers of drilling and other equipment required to construct the Offshore Intrepid. The balance will be used for general corporate purposes.
The company will inform the market of the price, date and number of shares to be issued upon completion of the private placement.
Scorpion Offshore Ltd. is a Bermuda based corporation founded in 2005 to own and operate state-of-the-art offshore drilling rigs.
Scorpion says it "intends to use the successful business model of Chiles Offshore Inc., a contract driller formed in 1997 and acquired by ENSCO International in 2002. The Chiles team successfully constructed and operated five ultra-premium 350 ft. rigs, three being LeTourneau Super 116's, and secured drilling contracts with major customers such as Shell, Texaco, ConocoPhilips, BP, Mobil, Apache and Dominion. The Chiles rigs achieved an average utilization rate of approximately 98 percent."
Not too surprisingly, its management team includes a number of members with Chiles Offshore experience in their resumes.