Sevan issues LOI for two more round rigs, plans IPO of drilling business

Sevan Marine ASA , the developer of a series of cylinder shaped offshore floaters, has issued LOI’s to China’s Cosco Nantong Shipyard. They cover turn-key EPC (Engineering, Procurement and Construction) contracts for two ultra deepwater drilling units based on the Sevan 650 design The contract price for each “round rig” is $525 million. Deliveries are expected in the fourth quarter of 2013 and second quarter of 2014. Under the LOI, Cosco Nantong has granted Sevan options to build two more units at the same price.

In a parallel develop, Sevan Marine ASA is today submitting an application for a listing of Sevan Drilling ASA  as an independent company on the main list of the Oslo Stock Exchange.

Sevan Marine says it has decided to organize its drilling activities into a new company to further grow and develop its ultra deep water rig business.  It is expected that the initial public offering towards institutional and private investors will comprise a share issue of up to $350 million and a secondary sale of shares by Sevan Marine, with the aim of Sevan Marine holding approx. 20 percent of the shares post IPO. The initial public offering is expected to commence in April.

Sevan Drilling Management

Mr. Jan Erik Tveteraas, the current CEO Sevan Marine, will assume the position as CEO of Sevan Drilling as from the first day of listing and Mr. Jon Willmann, Senior Vice President Drilling Sevan Marine, will assume the position of CFO. Jan Erik Tveteraas will be proposed to the nomination committee as a board member of Sevan Marine. Sevan Marine is in the process of selecting a successor for Mr. Tveteraas.

Mr. Jon C. Cole will assume the position as Chairman of Sevan Drilling. Mr. Cole was founder of Scorpion Offshore Ltd. and served as its President and Chief Executive Officer from 2005 to 2010. Mr. Cole has spent his entire career, spanning nearly three decades, in the contract drilling industry, including senior positions with Transocean and Ensco.

March 25, 2011