Northern Ocean is bringing the Deepsea Mira rig back to work starting April next year by signing a new contract with a subsidiary of Shell. This contract, valued at $70 million, will cover relocation and reactivation costs following a long period of inactivity for the rig.
Contract Details and Projections
The new contract includes an operational program in Trinidad and Tobago and broader Caribbean regions, estimated to last around 150 days. Additionally, Shell has an option for another one-year program in the area, which could raise the total contract value to approximately $226 million.
Read more: Expansion of Yakamoze Operations with the Start of Services at Port Aliaga 2
This contract continues the relationship that took the Deepsea Mira rig, built in 2018, to Namibia. The campaign was initially expected to last 45 days and generate $16 million in revenue, but ultimately took nearly three months and brought in about $31 million in the second quarter of this year. However, Shell did not exercise the option for a second well.
Current Status and Future of Northern Ocean
The Deepsea Mira rig has since been sitting in Walvis Bay. Northern Ocean announced at the end of August that several opportunities targeted for the second half of this year have either fallen through or been pushed to 2027, deferring the rig's return to work until next year.
Northern Ocean was recognized as a single-rig owner late last year after selling its sister unit, Deepsea Bollsta, to its operational partner Odfjell Drilling for $480 million.
In addition to the new contract with Shell, the company is launching a private placement worth approximately $71.5 million at a price of 6.50 Norwegian per share as part of a broader financial restructuring. This new structure includes a $100 million loan, a $35 million bridge facility, and a $15 million factoring line.
Hemen Holding, owned by Greg Stenton, has pre-committed about $60 million of this fundraising, while Sterna will contribute approximately $11.5 million through the conversion of PIK accumulated earnings into the project. Northern Ocean stated that this package should be sufficient to provide adequate liquidity until the Deepsea Mira begins operations in April.
Read more: U.S. Coast Guard Seizes Oil Shipment to Cuba · Tankers Shipment on New Route to China with Date 2023
