PERISAI PETROLEUM TEKNOLOGI BHD ("PERISAI" OR THE "COMPANY") ACQUISITION BY GARUDA ENERGY (L) INCAND HUMMINGBIRD ENERGY (L) INC, BOTH WHOLLY OWNED SUBSIDIARIES OF PERISAI OF TWO JACKUP DRILLING RIGS FROM THE OFFSHORE DRILLING COMPANY AND CLIFFS DRILLING COMPANY FOR A TOTAL CASH CONSIDERATION OF USD10,000,000

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PERISAI PETROLEUM TEKNOLOGI BHD ("PERISAI" OR THE "COMPANY")


ACQUISITION BY
GARUDA ENERGY (L) INC

AND HUMMING
B
IRD ENERGY (L) INC
,
BOTH
WHOLLY OWNED SUBSIDIAR
IES

OF PERISAI OF
TWO JACKUP DRILLING RIGS

FROM
THE
OFFSHORE DRILLING COMPANY

AND

CLIFFS DRILLING

COMPANY


FOR A TOTAL CASH
CONSIDERATION OF USD
10,000
,000




1.

INTRODUCTION


The Board of Directors ("Board") of Perisai wishes to announce that its
two
wholly owned
subsidiar
ies
,
Garuda Energy (L) Inc

(“Garuda”) and

H
umming
bird Energy (L) I
nc

(

Hummingbir
d”)
(“ Garuda together with Hummingbird, the Buyers”)

had, on
10 December
,
200
9

entered into a
Purchase and Sale Agreement

("
PSA
") with
Cliffs Drilling Company

(“Cliffs”) and
T
he

Offshore Drilling Company

(“TODCO”)

("
Cliffs together with TODCO,
the
"Seller
s
") for the acquisition of
two jackup drilling rigs

namely Hercules 191 and Hercules 255
respectively
(both collectively
referred to

as the “Rigs”)
for a total cash consideration of
USD
10,000
,000 (equivalent to approximately RM
34
,330,
000) ("Purchase Conside
ration")
("Acquisition of

Rigs
").


Unless otherwise stated, the following exchange rate as at
10 December

200
9

is used
throughout this Announcement:
-


USD1.00
: RM3.
43
3


Further details of the Acquisition of
Rigs
are set out in the ensuing sections.



2.

DETA
ILS

OF THE ACQUISITION OF
RIGS


Pursuant to the
PSA
,
Cliffs and TODCO ha
ve

agreed to sell to
Garuda and Hummingbird
Hercules 191 and
Hercules
255 respectively. Garuda and Hummingbird

ha
ve

agreed to
purchase from
Cliffs and TODCO Hercules 191 and
Hercules
255 respectively. The

Rigs

are
sold
free from all charters, encumbrances, mortgages and maritime liens or any other debts
whatsoever and upon the terms and conditions of the
PSA
.



2.1

Details of the
Rigs

Hercules 191 was designed and built by Baker Marine Cor
poration, Ingleside, Texas, classed
by the American Bureau of Shipping (ABS) and upgraded to comply with the applicable U.S.
Coast Guard rules and regulations.

Hercules 255 was designed and constructed by Bethlehem Steel Corporation, also classed by
ABS as

an A
-
1 Self
-
Elevating Mobile Drilling Unit.

2.2

Details of the
Sellers


Hercules Offshore
Inc
(“Hercules”)
is a
Delaware, US based company and is list
ed in
Nasdaq

and currently has a market capilisation of USD500 million
. Hercules

owns the largest shallow
-
wat
er jackup rig drilling fleet in the U.S. Gulf of Mexico and the fourth largest worldwide

providing shallow
-
water drilling and marine services to the oil and gas exploration and
production industry in the U
.
S
.


TODCO and Cliffs

are both registered companies

in Delaware, U
.
S
.

and are subsidiaries of
Hercules. TODCO and Cliffs are providers of contract oil and gas drilling services in the U
.
S
.

Gulf of Mexico and international locations.

.

2


2.3

Basis of arriving at the Purchase Consideration


The purchase

consider
ation of USD
10,000
,000 (equivalent to approximately
RM
34,330,
000) was arrived at on a willing
-
buyer willing
-
seller basis after taking into
account the
Rigs
specification,

make and age.



2.4

Liabilities to be assumed by Perisai


Save for the
Buyers’

obligatio
ns and liabilities in and arising from, under pursuant to or
in connection with the
PSA
, there are no other liabilities to be assumed by Perisai
or
the Buyers
arising from the Acquisition of
Rigs
.



2.5

Original Cost of Investment


The total cost of investmen
t for
Rigs

incurred by the
Sellers

is unavailable
.



2.6

Source of funding


The cash consideration of USD10,000,000 (equivalent to approximately
RM34,330,000) for the Acquisition of Rigs will be partly funded by proceeds from RCB
and
internally generated
funds and/or

borrowings as follows:
-



RM



Proc
eeds from RCB


13,732,000



internally generated funds/

borrowings
*


20,698,000



*

The proportion of which is not finalized at this juncture



3.

SALIENT TERMS OF THE
PSA



The salient terms of the
PS
A

include, amongst others, the following:
-


3.1

Mode of Settlement


The Purchase Consideration shall be satisfied in the following manner:
-



Mode of Settlement

Timing

<
----------
Consideration
---------
>




USD

RM equivalent






i.

Cash
*1

Upon execution
of the
PSA

1,500
,000

5,149,500






ii.

Cash
*2

Prior to the delivery of
Rigs

8,500,00
0

29,180,
500







TOTAL


10,00
0,000

34,330
,000


Notes:
-


*1

A

deposit
of USD1,500,000
as security for the correct fulfillment of the
PSA
, payable in full free
of ba
nk charges at a period of no later than
two

(
2
) banking days from the date of the
PSA

and
paid to the Sellers
.


*2

Part of t
he balance of the Purchase Consideration shall be paid in full free of bank charges to
Cliffs

prior to delivery of the
Hercules 191

and documents referred to in Clause
3.3(a)

of the
PSA
, on or prior to 31 March
20
10
.
The remaining balance of the Purchase Consideration shall
be paid in full free of bank charges to TODCO prior to delivery of the Hercules 255 and
3

documents referred to in
Clause 3.3(h) of the PSA, on or prior to 30 June 2010



3.2

Other Salient Terms


(a)

The
Rigs are

offered
on a
‘as is where is’ basis
to the Buyers
.

(b)

Expected time of delivery is on the
31 March 2010 for Hercules 191
and 30 June
2010 for
Hercules 255
.

(c)

Arbitration

Venue is at
London Court of International Arbitration

in accordance
with
English

Law.




4.

RATIONALE FOR THE ACQUISITION OF RIGS


Discovery of large oil & gas fields are becoming rare. In order to maintain current production
levels, oil and gas field owner
s in the Asia Pacific region are looking at viable solutions for
developing marginal fields. With the recent increase in crude oil prices, there is a need to
fast

track field developments that have been put on
-
hold due to global credit crunch over the
last

one year or so. Oil and gas field owners are looking for low
-
cost solutions to develop
marginal field as quickly as possible.


The Acquisition

of Rigs

will provide a platform to convert the
Rigs

into MOPSU
TM


and to
generate robust earnings by hiring them

to these oil and gas field owners. The acquisition is
synergistic to the evolved activities of Perisai to serve as a one stop centre for its planned
marginal field development and deepwater activities.



The conversion will take advantage of the current l
ow steel prices and fabrication rates and
provide an avenue

to bring in the profi
t
s

earlier than anticipated.



5.

PROSPECTS OF THE RIGS


There are continuing negotiations on long term hire agreements of the MOPSU
TM

with oil and
gas field owners who have indi
cated interest in the usage of converted MOPSU
TM

which will
provide them considerable schedule advantage to incrementally develop their fields.



6.

MITIGATING
RISK FACTORS


The MOPSU technology makes development of marginal fields cost effective and
economi
cally viable. The
Rigs

have proven track record and the conversion will be done at
highly specialized fabrication yards in the USA with supervision by experts in the field.


Demand and prospects of leasing the MOPSU
TM

on long term hire look positive, given

that
the
re are potentially

more than 500 marginal fields in the Asia Pacific region.



7.

FINANCIAL EFFECTS OF THE ACQUISITION OF
RIGS



7.1

Issued and Paid
-
up Share capital and Substantial Shareholders' shareholdings


The Acquisition of
Rigs
is not expected to
have any effect on the issued and paid
-
up
share capital of Perisai and the substantial shareholders' shareholdings of the Group
as the Purchase Consideration will be satisfied entirely in cash.



7.2

Net assets and gearing


The Acquisition of
Rigs
is not expe
cted to have any material effect on the net assets
per share of the Group.

4


Assuming that the Group obtains additional external borrowings of RM20,698,000 to
finance the Acquisition of Rigs, this will result in an increase in the Group’s gearing by
approxi
mately 0.1 times.



7.3

Earnings


The Rigs are only expected to generate revenue
after conversion
from

financial year
ending ("FYE") 31 December 201
0
onwards.



8.

APPROVALS REQUIRED


The Acquisition of
Rigs

is not subject to the approval of the shareholders n
or any relevant
authorities.



9.

INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/ OR PERSONS
CONNECTED



None of the directors and/ or major shareholders of Perisai and/ or persons connected to
them have any interest, direct or indirect, in the Acquisition of

Rigs
.



10.

DIRECTORS' RECOMMENDATION


The Board, having considered all aspects of the Acquisition of
Rigs
, is of the opinion that the
Acquisition of
Rigs

is in the best interest of the Company and the terms and conditions of the
PSA

are fair and reasonable
.



11.

ESTI
MATED TIMEFRAME FOR COMPLETION


Barring unforeseen circumstances and subject to all relevant approvals being obtained, the
Acquisition of
Rigs

is expected to be completed by the
30 June

20
10
.



12.

DEPARTURE FROM THE SECURITIES COMMISSION'S GUIDELINE
S FOR THE M
AIN

MARKET ("SC GUIDELINES")


To the best knowledge of the Board, the Acquisition of
Rigs

has not departed from the SC's
Guidelines.



13.

DOCUMENTS FOR INSPECTION


A copy of the
PSA

will be made available for inspection at the Company's Register
ed Office at
Suite 2, Penthouse, Lobby A, Wisma Leopad, No. 9, Jalan Tun Sambanthan, 50470, Kuala
Lumpur during normal business hours from Monday to Friday (excluding public holidays) for a
period of three (3) months from the date of this announcement.



T
his announcement is dated
14
th

December 2009
.