Ship Ahoy: Sembcorp Marine clinches US$236m jack-up rig deal

Rig to be delivered in 2Q16.

Sembcorp Marine pops the champagne on a US$236m jack-up rig deal secured by its subsidiary Jurong Shipyard.

According to OCBC Investment Research, it will build a high specification, tailor-made jack-up rig for new customer Hercules North Sea Ltd. Scheduled for delivery in 2Q16, the rig will be based on the F&G 2000E design which has enhanced features suitable for UK operations.

Here's more:

It will be chartered out to Maersk Oil and Gas upon completion. Payment terms are 10% upon contract signing, followed by another 10% a year after, and finally 80% upon delivery. Recall that SMM also had a F&G 2000E order in Oct 2010 from Seadrill with a price tag of US$192m per rig.

Besides a general increase in jack-up rig prices, the current unit could also be priced higher due to more customization. YTD, SMM has secured new orders worth about S$1.93b, accounting for 48% of our full year estimate.

This also brings the group’s total net order book to S$13.2b.

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