Sembcorp Marine Ltd. Friday said it has signed a deal worth over $1.3 billion with Borr Drilling Ltd. to sell nine jack-up oil drilling rigs.
The nine vessels will be delivered to Borr Drilling over the next 14 months. Borr Drilling will make an upfront payment of $500 million and their final price will include an additional market-based fee, the Sembcorp Marine said.
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The rigs include six vessels for which contracts with original customers were terminated as they didn't take delivery due to weak demand from the oil exploration and production industry. Three of the rigs are currently under construction.
The sale will help ease Sembcorp Marine's liquidity position, the company said. The deal may also be a signal that demand may be returning for oil drilling rigs amid relatively higher average crude oil prices this year and need to replace old vessels.
Sembcorp Marine had announced on Wednesday that it was terminating a contract for three drilling rigs with Integradora de Servicios Petroleros Oro Negro, SAPI de CV after Oro Negro didn't take delivery of the vessels that had already been built.
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(END) Dow Jones Newswires
October 06, 2017 12:41 ET (16:41 GMT)