Seadrill Operating has agreed to acquire all of the shares of Seadrill Polaris, which owns and operates the ultra-deepwater drillship, the West Polaris, from Seadrill.
The total consideration for the acquisition comprises $204m in cash and $336m of debt outstanding under the existing facility financing the drillship.
Delivered by Samsung shipyard in 2008, the dynamically positioned drillship is expected to carry out operations in Angola until the end of its contract with ExxonMobil, set to conclude in March 2018.
At present, the West Polaris is contracted with ExxonMobil on a daily rate of $653,000.
The balance of the purchase price would be funded by Seadrill Operating with a seller’s credit of $50m due in 2021.
Seadrill’s board of directors estimates that the total value proposition of the Polaris acquisition for the company is around $750m.
Under the acquisition agreement, Seadrill Polaris has agreed to pay Seadrill any day rate it receives that is more than $450,000.
From the current ExxonMobil contract, Seadrill is expected to receive around $60m in cash a year assuming an average economic usage of 95%.
Once the existing contract until 2025 concludes, Seadrill Polaris has also agreed to pay Seadrill 50% of any dayrate above $450,000 per day.
Image: West Polaris was delivered by the Samsung shipyard in 2008. Photo: courtesy of Seadrill Limited.