April 24, 2008
DryShips shares fall on news of drillship orders
Shares of DryShips Inc., (NasdaqGS:DRYS) fell today after it announced that it has exercised its option to acquire two advanced capability drillships for use in ultra deep water drilling locations.
The announcement followed Tuesday's news that Dryships is to make a tender offer for the remaining shares of Ocean Rig.
The drillships are to be constructed by Samsung Heavy Industries Co., Ltd. (SHI) and are expected to be delivered from the shipyard in the third quarter of 2011 at a cost of approximately $800 million each
The company says it "expects to receive shortly a firm commitment for the debt portion to finance construction and other payments."
Mr. George Economou, Chairman and CEO of DryShips Inc., commented: "I am very excited with our agreement to construct two premium, ultra deep water drillships, which is in line with our strategy of expanding our presence in the ultra deep water drilling sector. We hope that our pending mandatory tender offer for the acquisition of Ocean Rig ASA will be approved by its shareholders in early June. The successful acquisition of Ocean Rig will give us the operating platform necessary to construct, complete and operate these two drillships to the highest standards. Going forward we plan to expand our asset portfolio with further acquisitions and explore other strategic alternatives including the possibility of spinning off this business unit to our shareholders."
In a conference call to explain the company's ultra deep water strategy and vision, Mr. Economou said that plans included possible acquisition of two more drillships from clients of Cardiff Marine, Inc.
Dryships strategy is create a drilling operation to capitalize on the shortage of premium ultra deep water rigs that would be spun off to DryShips shareholders within a year from now and listed in the U.S..
It would be the only U.S. listed pure UDW drilling company.