GET THE DETAILS


POLL:
WORLD SHIPBUILDING COMPETITIVENESS

You're ordering a ship tomorrow. Where will you get the best price?

Japan
S. Korea
China
Vietnam
India
Other

Marine Log

November 8, 2007

Eastern Echo says Schlumberger offer undervalues company

The Board of Eastern Echo Holding Plc, management and founding shareholders, who together hold more than 14 percent of Eastern Echo's share capital, say they don't intend to accept the current offer from Schlumberger BV. They say that the offer price of a minimum of NOK 11 and a maximum of NOK 12 per share is "considered not to represent the fair value of the company."

Eastern Echo has developed an advanced 12 streamer 3D seismic vessel using the Ulstein X-bow design. It is building four of the vessels at Barreras in Spain (two for delivery by the end of 2008 and two for delivery by the end of 2009). It intends to build two more at Dubai Drydocks for delivery in the first and second quarters of 2009.

The Board says that based on a day rate assumption of $250,000 per vessel, operating expenses per day per vessel of $86,000, Eastern Echo will have a net result of approximately $ 220 million, or NOK 1.2 billion, in 2010. The unsolicited offer from Schlumberger values Eastern Echo at NOK 3.2 billionn. This implies a pay-back time of less than three years, which the Board finds unacceptably low.

The Board and management believe that the fair value of the company could be above NOK 20 per share.

Given the intention of certain shareholders not to accept the current offer, Schlumberger BV will not achieve an acceptance ratio of 90%, which means the prevailing offer price will then be NOK 11.

On November 7, 12.2 million shares were traded at a volume weighted average price of NOK 12.84 per share which is 16.7 percent higher than the offer price of NOK 11.

MORE NEWS STORIES