Dolphin Drilling, a Norwegian offshore drilling contractor, has decided to sell the semi-submersible Blackford Dolphin to Dubai-based SPM Energy Shipping. This contract, valued at up to $25 million, has been signed and includes two payment stages: $10 million upon delivery and another $15 million after receiving the first payment from SPM's upcoming drilling contract.
Contract Details and Closing Date
The closing date for this transaction is anticipated to occur around November 5, 2023. Additionally, the two companies have signed a memorandum of understanding that includes the management of the Blackford Dolphin rig and another semi-submersible rig. This contract also addresses plans for adding more rigs in the future.
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SPM and Dolphin's Role in Collaboration
Under this agreement, SPM will be responsible for marketing the rigs in India and other designated areas, covering investment costs, operational expenses, and guarantees related to future drilling contracts. Dolphin Drilling will also provide technical and operational management services, which could generate additional revenue without the need to maintain ownership of the assets. These management arrangements are still subject to definitive agreements.
Cost Reduction and Future Opportunities
Roni Bjornadal, President of Dolphin, stated that this deal will significantly reduce operational costs and eliminate investment costs associated with the upcoming class inspection of the Blackford Dolphin rig. This will also enable the company to access future drilling opportunities.
The semi-submersible Blackford Dolphin, built in 1974 and extensively upgraded in 2008, can operate in water depths of up to 1,829 meters. The last employer for this rig was Oil India, which signed a drilling contract worth $154 million in March 2024. This exploratory campaign in the Andaman Sea has been extended several times, with the latest deadline set for October 15, 2026.
In light of these developments, Dolphin's remaining fleet includes the Paul B. Loyd Jr. and Borgland Dolphin rigs, both of which signed multi-year contracts earlier this year.
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