SGX-listed Viking Offshore clinches $32m land drilling system contract

Demand for drilling rigs is rising.

Viking Offshore & Marine Limited said today that it has secured a 50-month bareboat charter for a land rig system worth approximately US$32 million. 

Under the contract, SGX-listed Viking’s wholly owned subsidiary Viking Asset Management Pte Ltd (“VAM”) will acquire from and leaseback the newbuild 1,500 horsepower train-type land rig and related drilling equipment system to a Chinese land rig specialist from September 2014.

The Chinese rig builder, which specialises in the design, manufacture and assembly of land rigs, has secured a contract with a major South-Asian energy operator, which will deploy the rig in North-Africa.

Here’s more from Viking Offshore:

Drilling will commence immediately on oil exploration sites licensed to the joint venture of the South-Asian energy operator and the local energy authorities.

The land rig, built to a design patented by the Chinese rig specialist, includes key equipment from renowned international suppliers and comes complete with drilling equipment and an 84-man accommodation camp.

Similarly configured train-type rigs have been successfully deployed in service with good track records in the Middle-East, Russia, and North-Africa.

Besides asset ownership, Viking also offers specialised offshore and marine services. VAM – which is building up a portfolio of oil and gas assets for recurring revenue – expect charter income from this transaction to have a material contribution to its bottom line for the financial year ending 31 December 2014.

Mr Daniel Lin, Executive Director of Viking and CEO of VAM, said: “Our foray into owning and chartering land rigs underscores our commitment to build up a portfolio of high-demand assets which can offer stable recurring revenue to enhance shareholder value.”

“In the coming years the demand for land-drilling rigs will continue to be strong and the high specifications of this train-type rig will make it a preferred choice for drilling operations. To further enhance our asset portfolio, we are in further discussion with them for a second land drilling rig of similar configuration and on similar terms,” he added.

Apart from the land drilling rig, Viking is also in joint venture with the Labroy Marine founders to own two CJ46 offshore jack-up drilling rigs which are expected to be completed within the fourth quarter of 2015.