Prospector Offshore hit by Cyprus banking woes

MARCH 26, 2013 – Oslo-listed Prospector Offshore Drilling S.A. today announced what it described as “a potential loss as a result of the Eurozone agreement with Cyprus.”

“Reference is made to the agreement, reported 25 March 2013, for a stabilization package between the government of Cyprus and its international creditors,” said announcement from Prospector. “A subsidiary of Prospector Offshore Drilling S.A. (the “Company” or “PROS”) currently has approximately USD 8.1 million on deposit at Cyprus Popular Bank PCL (“Laiki Bank”). The amount was deposited temporarily as part of a reorganization of the Company cash disbursement system for the shipyard projects in China. These measures were scheduled to be completed in the first quarter of 2013. Although the EU and Cyprus have not disclosed any details in this regard at this time, because of the above-referenced agreement, it is uncertain whether the Company will be able to recover the full amount on deposit at Laiki Bank. Although the Company’s potential loss at this time is unknown, the Company expects to take a provision to write-off a portion of its deposit at Laiki Bank.”

Laiki Bank is being wound down and its assets and insured deposits transferred to the Bank of Cyprus. Today, ratings agency Fitch cut its ratings for Laiki  from “B” to “Default.”

Prospector Offshore currently has contracts in place for the design, construction and delivery of six JU2000E high specification, harsh environment (HS/HE) jack-up drilling rigs. It also has option agreements for the construction of four additional rigs of the same design. The company says that, on deployment of its rigs, it 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.