PROS - Announces Agreement for Sale of Subsidiary and Option Agreement for Potential Sale of Another Subsidiary

PROS - Announces an Agreement for the Sale of One of the Company's Subsidiaries and an Option Agreement for the Potential Sale of Another of the Company's Subsidiaries

 

Luxembourg, 22 October 2012: Prospector Offshore Drilling S.A. (the "Company" or "PROS") announced today that its relevant Group subsidiaries have entered into an agreement (the "Rig 2 Company Sales Agreement") with Tabasco Jackup, S.A. de C.V., a subsidiary of Compañia Perforadora México, S.A.P.I. de C.V. ("Purchaser"), for the sale and purchase of 100% of the shares and certain intercompany obligations of Prospector Rig 2 Owning Company S.à r.l., the subsidiary that is party to a rig construction contract for the Company's second offshore jack-up drilling rig ("Rig 2") .  The total sales consideration is approximately USD 63.3 million in cash.  As part of the Rig 2 Company Sales Agreement, the purchaser will deposit USD 23.0 million in an escrow account no later than 25 October 2012, and closing is scheduled for December.  The closing of the sale and purchase of the shares will be subject to obtaining the approval of Dalian Shipbuilding Industry Offshore Co., Ltd. ("DSIC-Offshore") the builder of Rig 2.   Assuming the closing of the transaction occurs, the Company anticipates that its net proceeds from the sales transaction will be approximately USD 60.6. The Company also anticipates that it will recognize a gain of approximately USD 39.4 million at closing, based on the first instalment of USD 18.5 million for the shipyard contract with DSIC-Offshore of USD 185 million, project management costs incurred to date, broker commissions, taxes and professional fees related to the Rig 2 Company Sales Agreement.

The Company further announced that its relevant Group subsidiaries and the Purchaser have entered into an option agreement (the "Rig 4 Option Agreement") for the sale and purchase of 100% of the shares and certain intercompany obligations of Prospector Rig 4 Owning Company S.à r.l., the subsidiary that is party to a rig construction contract with DISC-Offshore for the Company's fourth rig ("Rig 4").  If the option is exercised, the total sales consideration would be approximately USD 48.5 million in cash. The option expires on 6 December 2012 and, if exercised, the share purchase agreement for the Rig 4 Owning Company shares would close simultaneously with the closing for the Rig 2 Company Sales Agreement. The closing of the sale and purchase of the Rig 4 Owning Company shares also is subject to obtaining the approval of DSIC-Offshore.  Assuming the closing of the transaction occurs, the Company anticipates that its net proceeds for the sale of the Rig 4 Owning Company shares would be approximately USD 46.0 million.  The Company anticipates that it would recognize a gain of approximately USD 23.5 million at closing, based on the first instalment of USD 19.9 million for the shipyard contract with DSIC-Offshore of USD 199 million, project management costs incurred to date, broker commissions, taxes and professional fees related to the Rig 4 Option Agreement. 

Robert W. Rose, the PROS President and CEO, commented today: "The agreement for the sale of shares in Rig 2 Owning Company is a very important step for the Company.  Proceeds from the sale, along with existing cash, would significantly reduce our cash requirements to take the delivery of PROSPECTOR 3 later in 2013.  If the Rig 4 Option Agreement is exercised, we will be in an excellent position to grow the Company through additional new rig construction.  Also, we are very encouraged with the increasing tender activity and the charter opportunities we have identified for PROSPECTOR 3."

Shareholders of the Company are encouraged to participate in a related conference call, scheduled to be held on 23 October 2012 at 1600 (Central European Time). Participants can connect to conference # 54591615 by dialing the standard international dial-in number: [phone].

Participants can also connect using the following toll-free numbers:

Norway: 80019414

United States: 1-866-966-9439

United Kingdom: 08006940257

Singapore:  8001203988

Hong Kong:  800968777

About PROS:

PROS is a high specification jack-up drilling contractor.  PROS currently has contracts in place for the design, construction and delivery of six F&G JU2000E high specification, harsh environment (HS/HE) jack-up drilling rigs (five upon the closing of the Rig 2 Company Sales Agreement and four in the event of exercise of the option under the Rig 4 Option Agreement).  The Company's first rigs are scheduled for delivery commencing in the first quarter of 2013.  PROS also has option agreements for the construction of six additional rigs of the same design.  Upon deployment of its rigs, PROS, under its proven management team, will have the newest fleet of HS/HE jack-up rigs in the world, operating with the most advanced drilling systems available in the industry.

This press release contains forward-looking statements that involve risks and uncertainties.  You are cautioned not to put undue reliance on forward-looking statements because actual events and results may differ materially from the expected results described by such forward-looking statements.  Prospector Offshore Drilling S.A. disclaims any obligation to update and revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Contact:

Steven A. Manz

Chief Financial Officer

Prospector Offshore Drilling S.A.

Tel: [phone]

 

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

PROS_Announces Agreement for Sale of Subsidiary and Option

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Source: Prospector Offshore Drilling via Thomson Reuters ONE

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