February 6, 2001
First Wave files for Chapter 11
First Wave Marine, Inc. has filed a petition for relief under Chapter 11 of Title 11 of the United States Code in the Southern District of Texas. In connection with the filing, First Wave announced that its senior secured working capital lender has provided it with $20 million in post-petition financing, subject to Bankruptcy Court approval. This, says First Wave, will secure its working capital position and allow for the continuance of normal, uninterrupted operations during the restructuring.
First Wave has also requested immediate Bankruptcy Court authority to pay employees and critical subcontractor and vendor pre-petition payables on an uninterrupted basis. This, it says, will make it possible for the company to avoid disruption in its operations and its network of critical vendors and subcontractors. As of the date of filing, the Company's payables aging was not outside industry norms.
First Wave commenced restructuring discussions in December 2000 with an ad hoc committee representing the majority of holders of its 11% senior notes, due 2008. The company did not make its semi-annual interest payment on the senior notes, which was due February 1st.
First Wave says the discussions have been "constructive" and anticipates that such discussions will continue during the Chapter 11 cases and, "ultimately, result in a restructuring of the company's existing obligations that will enhance the financial and competitive strength of the company."
First Wave says it does not anticipate any employee layoffs in connection with the Chapter 11 filing and presently contemplates that it will continue under current management during the reorganization proceedings and upon emergence from Chapter 11.
Chairman and CEO Sam Eakin described the Chapter 11 proceeding as a "first and necessary step for restructuring the company's long term debt."
He said that the burden of debt service had weighed heavily on the Company's financial performance. "Interest expense accounted for approximately two-thirds of First Wave's 1999 pretax losses, and substantially all of its 2000 pretax losses. It is now time to resolve our challenges and to implement a restructuring of First Wave. We believe this restructuring will posture the company to meet the demands of its growing customer base during the current upswing in the oilfield services cycle."
Eakins said customers would "continue to receive the same consistent level of job performance and quality that First Wave is known for."
"Our plans have been well communicated and have received broad support from customers, employees and vendors," he continued. "We have confidence in a timely and successful emergence from Chapter 11 proceedings.''
Heavy fine for Barrier Reef grounding
An court in Cairns, Australia, has levied a $220,000 fine on Malaysian International Shipping Corporation, owner of the tanker Bunga Teratai Satu for causing serious environmental damage when the ship ran aground on the Great Barrier Reef last November 2.
The company has also agreed to pay another three quarters of a million dollars to repair the damage. The fine is the biggest secured by Queensland's environmental protection agency.
The BBC reports that the tanker struck the reef in the darkness of early morning, soon after dropping a pilot off the Queensland port of Cairns.
Investigations confirmed the ship's first officer was the only man in charge at the time and he was talking on a telephone to his mother-in-law in Karachi.
The ship was freed 12 days later by tugs and winches anchors set on the seabed, but only after the tops of three coral outcrops were blasted away.
None of the ship's cargo of fungicides, pesticides and other chemicals escaped into the sea, but the vessel gouged a 70-meter scar in the reef and the extent of environmental damage from the ships' anti-fouling paint has yet to be defined.
Queensland Environment and Heritage Minister Rod Welford said the fine sent a strong message to those who traveled on or near the Great Barrier Reef.
"The outcome highlights the fact that Queensland will accept nothing less than the highest standards in protecting our environment," he said.
"This is the largest (fine) ever imposed under Queensland's environmental protection laws and is the second largest fine imposed in Australia."
Maersk orders semi for Caspian
Maersk Contractors has been awarded a contract with Exxon Azerbaijan Operating Company LLC (Exxon Azerbaijan) for a three-year drilling program. The contract will entail building a semi-submersible drilling rig for operation in the Caspian Sea. The contract for the new semi-submersible was signed on February 1 with Keppel FELS, Singapore and Caspian Shipyard Company, Baku.
The rig will be drilling in the deep water offshore Azerbaijan in the Nakhchivan and Zafar-Mashal Production Sharing Agreement fields operated by Exxon Azerbaijan and the Absheron Production Sharing Agreement field operated by Chevron Overseas Petroleum Azerbaijan Limited.
The new semie will be the largest and most powerful unit in the Caspian Sea, capable of drilling in water depths up to 1,000 m, equivalent to the deepest areas in the Caspian Sea.
The variable deckload capacity is 4,000 tons, and the derrick and riser tension capacities are each rated at two million pounds. The rig will be equipped with three 7,500 pounds-per-square-inch working pressure mudpumps and a top drive with 750 tons capacity. The new unit will be able to accommodate 130 people.
The mechanization and environmental protection systems will be based on Maersk Contractors experience in the North Sea.
Construction of the rig will be undertaken by both Keppel FELS in Singapore and the Caspian Shipyard Company in Baku and is scheduled to be completed in approximately three years.
Maersk Contractors entry into the Caspian Sea is part of the A.P. Moller Groups active expansion in the Caucasus and Central Asian region, said Thomas Thune Andersen, president of Maersk Contractors.
"The Caspian is estimated to hold huge reserves of oil and gas and offers substantial growth potential for us, and our international customers are already present in the area," he noted. "Our experience of the North Sea will be put to good use since the Caspian Sea offers similarities to the North Sea, with its challenging environmental conditions.
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