DEFA14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ___)
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Allis-Chalmers Energy Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined): |
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Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
filing. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
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Forward-Looking Statements
This communication contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or
phrases such as will, anticipate, estimate, expect, project, intend, plan, believe,
target, forecast, and other words and terms of similar meaning. These forward-looking
statements involve a number of risks and uncertainties. Seawell and Allis-Chalmers caution readers
that any forward-looking statement is not a guarantee of future performance and that actual results
could differ materially from those contained in the forward-looking statement. Such forward-looking
statements include, but are not limited to, statements about the benefits of the proposed merger
involving Seawell and Allis-Chalmers, including future financial and operating results, Seawells
and Allis-Chalmers plans, objectives, expectations and intentions, the expected timing of
completion of the transaction, and other statements that are not historical facts. Important
factors that could cause actual results to differ materially from those indicated by such
forward-looking statements are set forth in Allis-Chalmers filings with the Securities and
Exchange Commission. These include risks and uncertainties relating to: the ability to obtain the
requisite Allis-Chalmers stockholder approval; the risk that Allis-Chalmers or Seawell may be
unable to obtain governmental and regulatory approvals required for the merger, or required
governmental and regulatory approvals may delay the merger or result in the imposition of
conditions that could cause the parties to abandon the merger; the risk that a condition to closing
of the merger may not be satisfied; the timing to consummate the proposed merger; the risk that the
businesses will not be integrated successfully; the risk that the cost savings and any other
synergies from the transaction may not be fully realized or may take longer to realize than
expected; disruption from the transaction making it more difficult to maintain relationships with
customers, employees or suppliers; the diversion of management time on merger-related issues;
general worldwide economic conditions and related uncertainties; and the effect of changes in
governmental regulations. Neither Seawell nor Allis-Chalmers undertakes any obligation to publicly
update any forward-looking statement, whether as a result of new information, future events or
otherwise.
Additional Information and Where to Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any
securities or a solicitation of any vote or approval. The publication or distribution of this
communication may, in some countries, be restricted by law or regulation. Accordingly, persons who
come into possession of this document should inform themselves of and observe these restrictions.
To the fullest extent permitted by applicable law, Seawell, Allis-Chalmers and their
respective affiliates disclaim any responsibility or liability for the violation of such
restrictions by any person. In connection with the proposed merger between Seawell and
Allis-Chalmers, Seawell will file with the SEC a Registration Statement on Form F-4 that will
include a proxy statement of Allis-Chalmers that also constitutes a prospectus of Seawell. Seawell
and Allis-Chalmers will mail the proxy statement/prospectus to the Allis-Chalmers stockholders.
Seawell and Allis-Chalmers urge investors and stockholders to read the proxy statement / prospectus
regarding the proposed merger when it becomes available, as well as other documents filed with the
SEC, because they will contain important information. You may obtain copies of all documents filed
with the SEC regarding this transaction, free of charge, at the SECs website (www.sec.gov). You
may also obtain these documents, free of charge, from Seawells website (www.seawellcorp.com) under
the tab Investors. You may also obtain these documents, free of charge, from Allis-Chalmers
website (www.alchenergy.com) under the tab For Investors and then under the heading SEC
Filings.
Participants In The Merger Solicitation
Seawell, Allis-Chalmers, and their respective directors, executive officers and certain other
members of management and employees may be soliciting proxies from Allis-Chalmers stockholders in
favor of the merger and related matters. Information regarding the persons, who may, under the
rules of the SEC, is deemed participants in the solicitation of Allis-Chalmers stockholders in
connection with the proposed merger will be set forth in the proxy statement/prospectus when it is
filed with the SEC. You can find information about Allis-Chalmers executive officers and directors
in its definitive proxy statement filed with the SEC on April 30, 2010. Additional information
about Seawells executive officers and directors and Allis-Chalmers executive officers and
directors can be found in the above-referenced Registration Statement on Form F-4 when it becomes
available. You can obtain free copies of these documents from Seawell and Allis-Chalmers using the
contact information above.
Published: 08:56 CET 30-11-2010 /Thomson Reuters /Source: Seawell /XOSL: SEAW /ISIN: BMG795601019
Seawell Limited (SEAW) Third Quarter and Nine Months 2010 Results
Hamilton, Bermuda, November 30, 2010
Third Quarter Highlights
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Revenues of NOK1,069.9 million, representing a 17.2% year on year increase. |
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EBITDA of NOK130.7 million including one time items. |
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Net loss for the quarter of NOK56.7 million and loss per share of NOK0.35
primarily due to unrealised FX losses of NOK107.9 million. |
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Allis-Chalmers (NYSE:ALY) merger agreement executed in August and expected to
close in first quarter 2011 pending regulatory approval. |
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Gross proceeds of NOK2,654.2 million through the issuance of 115.4 million
shares at NOK23 in an August private placement. |
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Awarded the ConocoPhillips PSI (Personal Safety Involvement) award in the third
quarter. |
Financial Statements
Third Quarter Operating Results
Consolidated revenues in the third quarter were NOK1,069.9 million compared to NOK1,050.1 million
in the previous quarter. EBITDA for the third quarter amounted to NOK130.7 million including
NOK13.9 million in merger costs and a reversal of NOK9 million in personnel insurance liabilities.
Net Financial Items
Interest expense for the third quarter was NOK20.9 million compared to NOK23.9 million in the
previous quarter. Other financial items for the third quarter were expenses of NOK 119.9 million
compared to a gain of NOK28.7 million for the second quarter, mainly due to an unrealised FX loss
of NOK107.9 million for the third quarter based on an ending FX rate for NOK/USD of 5.85.
Cash Flow
Cash and cash equivalents, excluding restricted cash, totalled NOK1,369.2 million for the third
quarter compared to NOK244.6 million for the previous quarter. The increases in cash and cash
equivalents and other current assets are mainly due to the August private placement.
Share Capital
A total of 225,400,050 shares of par value $2.00 each were issued and outstanding as of September
30, 2010. In addition, a total of 6,507,000 options were outstanding under the companys long-term
employee incentive plans.
In August we signed a milestone merger agreement with Allis-Chalmers and established a new roadmap
for our future said Jorgen Rasmussen, Chairman of the Board. We are looking forward to close
this transaction as planned, we have completed many important elements of the conditions by now,
including the listing on the Oslo Bors and in Q1 we expect to move forward with the new Seawell!
Attachment: 2010 3Q Results
For further information, please contact:
Thorleif Egeli, CEO Seawell Management AS, Phone: +47 51 30 80 00
Lars Bethuelsen, CFO Seawell Management AS, Phone: +47 51 30 80 00
This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities
Trading Act)
Seawell Limited (SEAW)
Third Quarter and Nine Months 2010 Results
Third Quarter Highlights
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Revenues of NOK1,069.9 million, representing a 17.2% year on year increase. |
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EBITDA of NOK130.7 million including one time items. |
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Net loss for the quarter of NOK56.7 million and loss per share of NOK0.35 primarily due to
unrealised FX losses of NOK107.9 million. |
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Allis-Chalmers (NYSE:ALY) merger agreement executed in August and expected to close in
first quarter 2011 pending regulatory approval. |
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Gross proceeds of NOK2,654.2 million through the issuance of 115.4 million shares at NOK23
in an August private placement. |
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Awarded the ConocoPhillips PSI (Personal Safety Involvement) award in the third quarter. |
Financial Statements
Third Quarter Operating Results
Consolidated revenues in the third quarter were NOK1,069.9 million compared to NOK1,050.1 million
in the previous quarter. EBITDA for the third quarter amounted to NOK130.7 million including
NOK13.9 million in merger costs and a reversal of NOK9 million in personnel insurance liabilities.
Net Financial Items
Interest expense for the third quarter was NOK20.9 million compared to NOK23.9 million in the
previous quarter. Other financial items for the third quarter were expenses of NOK 119.9 million
compared to a gain of NOK28.7 million for the second quarter, mainly due to an unrealised FX loss
of NOK107.9 million for the third quarter based on an ending FX rate for NOK/USD of 5.85.
Cash Flow
Cash and cash equivalents, excluding restricted cash, totalled NOK1,369.2 million for the third
quarter compared to NOK244.6 million for the previous quarter. The increases in cash and cash
equivalents and other current assets are mainly due to the August private placement.
Revolving Credit Facility Agreement
In September, Seawell entered into a NOK1,500 million Revolving Credit Facility Agreement to
replace its NOK1,500 million Senior Bank Debt Facility Agreement dated December 2007. As of
September 30th, approximately NOK1,112 million of the new facility had been drawn. This
new facility is a 12-month bridge to support the Allis-Chalmers merger and is classified under
current liabilities.
New USD 550 Million Multi-Currency Term and Revolving Credit Facility Agreement
In November, Seawell executed a new five-year USD550 million multi-currency term and revolving
facilities agreement with a syndicate of banks. The purpose of the new facilities is to replace
Seawells the NOK1,500 million 12-month bridge facility, for general corporate purposes, and, if
necessary, to partially finance the cash option to Allis-Chalmers shareholders and refinance
existing indebtedness in Allis-Chalmers and its subsidiaries.
1
Share Capital
A total of 225,400,050 shares of par value $2.00 each were issued and outstanding as of September
30, 2010. In addition, a total of 6,507,000 options were outstanding under the companys long-term
employee incentive plans.
Merger with Allis-Chalmers Energy Inc.
Seawell announced on August 12 the execution of a definitive merger agreement providing for the
acquisition of Allis-Chalmers Energy Inc. (NYSE: ALY) by Seawell in a transaction valued at
approximately USD 890 million (including assumed debt). The combined companys Drilling and Well
Services comprising some 6600 employees will operate in more than 30 of the worlds key oil and gas
regions.
Under the merger agreement, Allis-Chalmers stockholders will elect to receive 1.15 shares of
Seawell common stock or USD 4.25 cash for each share of Allis-Chalmers common stock, inclusive of
existing preferred stock converted contemporaneously with the closing. The merger is subject to the
approval of Allis-Chalmers stockholders. Seawell and Allis-Chalmers have submitted a joint proxy
statement / prospectus with the U.S. Securities and Exchange Commission for approval and anticipate
that regulatory approvals will be obtained in time to complete the transaction during the first
quarter of 2011. The companies are planning and preparing for the integration of their operations
commencing as early as March 1.
Upon completion of the merger, the combined companys new Chief Executive Officer and President
will be Jørgen Peter Rasmussen (51), who today is the Executive Chairman of the Seawell Limited
board, and the Chief Operating Officer and Executive Vice-President will be Thorleif Egeli (46),
today the Chief Executive Officer of Seawell Management AS. The non-executive Chairman of Seawell
Limited will be Mr. Saad Bargach and the Vice-Chairman will be Mr. Fredrik Halvorsen.
Operational Report
Drilling Services
Operating revenues, excluding reimbursables, in the third quarter were NOK770.6 million compared to
NOK726.5 million in the previous quarter. The operating profit was NOK86.7, before allocating
merger costs of NOK9.7 million, compared to an operating profit of NOK86.0 in the previous quarter.
Platform Drilling Services
Seawell had no major downtime for the third quarter and operational key performance indicators
remained sound.
The company commenced conductor setting operations on Peregrino B in Brazil in late September and
have already completed operations ahead of schedule. Ekofisk operations commenced without delays
and with a high utilization rate (97%) throughout the period. We completed a safe and efficient
start-up of Gyda drilling operations in September utilising crews transferred from the Ula and
Valhall platforms currently in maintenance mode.
Drilling Facilities Engineering
Seawell successfully completed the Brent Bravo and Tern Alpha rig re-activation projects as well as
delivering several minor projects during the third quarter. Engineering support for the drilling
operations phase of the Peregrino facilities has commenced and we continue to support the Mariner
development project. Seawell also had a successful start-up on a FEED study for tree handling
modifications on a MODU.
Completion of Phase 2 of the SFLL project for Stafjord C has experienced challenges, with delays in
equipment delivery from vendors and technical problems with the design and fabrication of some
equipment components. Resolving these issues has delayed completion of the project with knock-on
delays in the commencement of Statfjord B.
The acquisition of Rig Inspection Services (RIS) in Singapore and Perth was concluded in September.
Total acquisition price is up to NOK60 million including earn-out.
2
Modular Rigs
Seawell ordered its first modular drilling rig in February 2008 from Streicher GmbH in Germany with
total capital expenditure of approximately USD50 million. The rig, on a stand alone basis, is able
to perform production drilling, work-overs, well intervention of any kind, and plug and abandonment
work.
The project has moved into its final stages and during the third quarter the rig has been
undergoing extensive system and equipment commissioning and testing. The commissioning phase will
continue into the fourth quarter followed by the final acceptance testing of the rig.
At present, the rig is offered for onshore drilling projects scheduled in the first half of 2011.
This will provide a lower contribution to capital than offshore but valuable operational
experience. The company sees several offshore opportunities for the modular rig late 2011 and into
2012.
Well Services
Operating revenues in the third quarter were NOK167.4 million compared to NOK176.9 million in the
previous second quarter. Operating profits were NOK25.8 million after C6 research and development
expenses of NOK3.8 million, but before allocated merger cost of NOK4.2 million.
The Well Services division consists of three main units:
Well Intervention Services
Seawell specialize in wireline conveying services and ultrasonic wireline technology. The unit has
in the quarter successfully executed several commercial jobs with the Well Performance Eye (WPE)
Seawell Oil Tools (Oilfield Technology)
Third quarter activity for our range of gas tight barrier plugs was significantly lower than
previous quarters due to planned productions stops on several fields in the North Sea.
C6 Technologies
The ComTrac system is in the final phase of onshore testing and we will thereafter commence
offshore testing of the equipment in cooperation with the operator/project sponsor. We experienced
significant interest from clients for the technology in the third quarter and expect to perform the
first commercial job during the second half of 2011.
Organisation
The company has recruited several key managers in the third quarter and will continue to strengthen
the organisation going forward.
Subsequent Events
Seawell listed its shares on OSE on November 26 under the ticker SEAW.
Strategy
Seawells strategic objective is to build a profitable and high growth oilfield services company
focused on offering a differentiated portfolio of products and services through its two business
segments, Drilling Services and Well Services. The key strategies to achieve this objective are:
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Developing and maintaining a solid footprint in each of the worlds significant oil
producing regions through good customer relationships, strong local presence and superior
personnel; |
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Exploiting opportunities to strengthen Seawells service offering by acquiring unique
technologies and skills within the drilling and well services market; and |
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Developing and providing packaged, integrated services across Seawells operating
divisions in response to customer requirements. |
3
Outlook
Seawell expects continued growth in Well Intervention Services and Platform Drilling Services in
the fourth quarter. We also expect growth in Oilfield Technology compared to the third quarter with
Engineering services expected to remain flat. All in, we expect revenues and EBITDA from
operations to grow in the fourth quarter. The market conditions for the companys products and
services continue to improve. Seawell is in the process of commercialising several differentiated
technologies in the next twelve months. The Board of Directors anticipate that these products and
services, in combination with M&A activities, will contribute significantly to the companys future
growth.
November 29, 2010
The Board of Directors
Seawell Limited
Hamilton, Bermuda
Questions should be directed to:
Thorleif Egeli, Chief Executive Officer, Seawell Management AS
Lars Bethuelsen, Chief Financial Officer, Seawell Management AS
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES,
CANADA, AUSTRALIA, OR JAPAN.
This document is not an offer of securities for sale in the United States, Australia, Canada, Japan
or in any jurisdiction in which such offer is unlawful. Securities may not be offered or sold in
the United States absent registration under the US Securities Act of 1933 (the Securities Act) or
an exemption from, or in a transaction not subject to, registration. Subject to certain exceptions,
the securities referred to herein may not be offered or sold in Australia, Canada or Japan or to,
or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan.
The offer and sale of the securities referred to herein has not been and will not be registered
under the Securities Act or under the applicable securities laws of Australia, Canada or Japan.
Seawell does not presently intend to register any securities under the Securities Act.
This document is only addressed to and is only directed at persons in member states of the European
Economic Area (the EEA) who are qualified investors within the meaning of Article 2.1(e) of the
Prospectus Directive (Directive 2003/71/EC). In addition, in the United Kingdom, these materials
are directed solely at persons who (i) have professional experience in matters relating to
investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (the Order) or (ii) are persons falling within Article 49(2)(a) to (d) of
the Order and other persons to whom it may lawfully be communicated (all such persons together
being referred to as relevant persons). These materials are addressed only to, and directed only
at, relevant persons and qualified investors and must not be acted on or relied on (i) in the
United Kingdom, by persons who are not relevant persons or (ii) in any member state of the EEA
other than the United Kingdom, by qualified investors. Any investment or investment activity to
which these materials relate is available only to, and will be engaged in only with, in the United
Kingdom, relevant persons, and in any member state of the EEA other than the United Kingdom,
qualified investors.
Forward-looking statements
This news release contains forward-looking statements. These statements are based on various
assumptions, many of which are based, in turn, upon further assumptions, including Seawell
managements examination of historical operating trends.
Including among other factors that in the Companys view could cause actual results to differ
materially from the forward-looking statements contained in this press release are the following:
the competitive nature of the offshore drilling industry, oil and gas prices, technological
developments, government regulations, changes in economical conditions or political events,
inability of the Company to obtain financing for new investments on favourable terms, changes of
the spending plan of our customers, changes in the Companys operating expenses including crew
wages, insurance, repairs and maintenance, failure of yards to comply with delivery schedules on a
timely basis and other important factors mentioned from time to time in our reports filed with the
Norwegian Securities Dealers Association.
4
Seawell Limited
INDEX TO UNAUDITED INTERIM FINANCIAL STATEMENTS
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Page 06 |
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Page 07 |
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Page 08 |
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Page 09 |
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Page 11 |
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Page 12 |
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5
Seawell Limited
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
for the three months ended September 30, 2010 and 2009 and the nine months
ended September 30, 2010 and 2009,
(In millions of NOK, except per share data)
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For the three month |
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For the nine month |
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period ended |
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period ended |
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September 30, |
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September 30, |
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2010 |
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2009 |
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2010 |
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2009 |
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Operating revenues |
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Operating revenues |
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938.0 |
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751.7 |
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2 658.2 |
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2 373.1 |
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Reimbursables |
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131.9 |
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161.3 |
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407.5 |
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589.9 |
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Other revenues |
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0.0 |
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0.0 |
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0.0 |
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0.0 |
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Total operating revenues |
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1 069.9 |
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913.0 |
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3 065.7 |
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2 963.0 |
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Operating expenses |
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Operating expenses |
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778.0 |
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604.1 |
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2 175.7 |
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1 955.2 |
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Reimbursable expenses |
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120.3 |
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154.0 |
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389.0 |
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564.6 |
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Depreciation and amortization |
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32.1 |
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33.5 |
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99.3 |
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94.8 |
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General and administrative expenses |
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40.9 |
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23.7 |
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98.0 |
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66.3 |
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Total operating expenses |
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971.3 |
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815.3 |
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2 762.0 |
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2 680.9 |
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Net operating income |
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98.6 |
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97.7 |
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303.7 |
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282.1 |
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Financial items |
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Interest income |
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3.5 |
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1.1 |
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6.1 |
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4.3 |
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Interest expenses |
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(20.9 |
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(23.0 |
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(68.0 |
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(72.4 |
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Other financial items |
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(119.9 |
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(60.2 |
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(99.6 |
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(33.5 |
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Total financial items |
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(137.3 |
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(82.1 |
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(161.5 |
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(101.6 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) before income taxes |
|
|
(38.6 |
) |
|
|
15.6 |
|
|
|
142.2 |
|
|
|
180.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
|
(18.1 |
) |
|
|
(2.8 |
) |
|
|
(69.4 |
) |
|
|
(47.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/ (loss) |
|
|
(56.7 |
) |
|
|
12.8 |
|
|
|
72.8 |
|
|
|
132.6 |
|
Net income/ (loss) attributable to the parent |
|
|
(56.6 |
) |
|
|
13.2 |
|
|
|
73.2 |
|
|
|
134.1 |
|
Net income/ (loss) attributable to the
non-controlling interest |
|
|
(0.1 |
) |
|
|
(0.3 |
) |
|
|
(0.4 |
) |
|
|
(1.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings/ (loss) per share (NOK) |
|
|
(0.35 |
) |
|
|
0.12 |
|
|
|
0.57 |
|
|
|
1.22 |
|
Diluted earnings/ (loss) per share (NOK) |
|
|
(0.35 |
) |
|
|
0.12 |
|
|
|
0.56 |
|
|
|
1.22 |
|
See accompanying notes that are an integral part of these Consolidated Financial Statements.
6
Seawell Limited
UNAUDITED CONSOLIDATED STATEMENT COMPREHENSIVE INCOME
for the three months ended September 30, 2010 and 2009 and the nine months
ended June 30, 2010 and 2009
(In millions of NOK)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three month |
|
|
For the nine month |
|
|
|
period ended |
|
|
period ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/ (loss) |
|
|
(56.7 |
) |
|
|
12.8 |
|
|
|
72.8 |
|
|
|
132.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income/ (loss), net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on foreign exchange |
|
|
4.9 |
|
|
|
6.0 |
|
|
|
2.2 |
|
|
|
1.0 |
|
Change in unrealized gain/ (loss) on interest rate swaps |
|
|
0.2 |
|
|
|
10.0 |
|
|
|
(7.3 |
) |
|
|
4.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income/ (loss): |
|
|
5.1 |
|
|
|
16.0 |
|
|
|
(5.1 |
) |
|
|
5.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income/ (loss) for the period |
|
|
(51.6 |
) |
|
|
28.8 |
|
|
|
67.7 |
|
|
|
138.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income/ (loss) attributable to the parent |
|
|
(51.5 |
) |
|
|
29.1 |
|
|
|
68.1 |
|
|
|
139.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to the
non-controlling interest |
|
|
(0.1 |
) |
|
|
(0.3 |
) |
|
|
(0.4 |
) |
|
|
(1.5 |
) |
Accumulated other comprehensive income as per September 30, 2010 and
December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2010 |
|
|
2009 |
|
The total balance of accumulated other
comprehensive income is made up as follows: |
|
|
|
|
|
|
|
|
Unrealized gain on foreign exchange |
|
|
(7.2 |
) |
|
|
(9.4 |
) |
Actuarial gain relating to pension |
|
|
41.8 |
|
|
|
41.8 |
|
Other comprehensive gains/losses |
|
|
(9.4 |
) |
|
|
(2.1 |
) |
|
|
|
|
|
|
|
Accumulated other comprehensive income period end |
|
|
25.2 |
|
|
|
30.3 |
|
|
|
|
|
|
|
|
Note: All items of other comprehensive income/ (loss) are stated net of tax.
The applicable amount of income taxes associated with unrealized gain on foreign exchange and other
comprehensive gains/losses is NOK 0 due to the fact that the items relate to companies domiciled in
non-taxable jurisdictions. The applicable amount of income taxes associated with actuarial gain
related to pension is NOK 11.7 million as this item related to companies domiciled in Norway where
the tax rate is 28%.
See accompanying notes that are an integral part of these Consolidated Financial Statements.
7
Seawell Limited
UNAUDITED CONSOLIDATED BALANCE SHEETS
as of September 30, 2010 and December 31, 2009
(In millions of NOK)
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2010 |
|
|
2009 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
1 369.2 |
|
|
|
236.7 |
|
Restricted cash |
|
|
41.1 |
|
|
|
51.8 |
|
Accounts receivables, net |
|
|
694.8 |
|
|
|
550.4 |
|
Other current assets |
|
|
773.5 |
|
|
|
191.0 |
|
|
|
|
|
|
|
|
Total current assets |
|
|
2 878.6 |
|
|
|
1 029.9 |
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
|
Drilling equipment and other fixed assets |
|
|
379.0 |
|
|
|
404.9 |
|
Asset under construction |
|
|
178.1 |
|
|
|
167.0 |
|
Deferred tax assets |
|
|
0.6 |
|
|
|
9.3 |
|
Other intangible assets |
|
|
201.1 |
|
|
|
135.7 |
|
Goodwill |
|
|
1 642.1 |
|
|
|
1 589.8 |
|
Other non-current assets |
|
|
0 |
|
|
|
3.2 |
|
|
|
|
|
|
|
|
Total non-current assets |
|
|
2 400.9 |
|
|
|
2 309.9 |
|
|
|
|
|
|
|
|
Total assets |
|
|
5 279.5 |
|
|
|
3 339.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Current portion of long-term debt |
|
|
1 120.8 |
|
|
|
260.8 |
|
Other current liabilities |
|
|
640.5 |
|
|
|
509.5 |
|
Amounts due to parent |
|
|
0 |
|
|
|
191.1 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
1 761.3 |
|
|
|
961.4 |
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
|
Subordinated loan |
|
|
0.0 |
|
|
|
613.6 |
|
Long-term interest bearing debt |
|
|
22.1 |
|
|
|
987.7 |
|
Deferred taxes |
|
|
0.0 |
|
|
|
0.0 |
|
Other non-current liabilities |
|
|
170.9 |
|
|
|
149.8 |
|
|
|
|
|
|
|
|
Total non-current liabilities |
|
|
193.0 |
|
|
|
1 751.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders equity |
|
|
|
|
|
|
|
|
Common shares of par value US$2.00 per share: |
|
|
|
|
|
|
|
|
600,000,000 shares authorized
225,400,050 outstanding at September 30,
2010 |
|
|
|
|
|
|
|
|
(December, 31 2009: 110,000,050) |
|
|
2 622.4 |
|
|
|
1 198.4 |
|
Additional paid in capital |
|
|
1 369.3 |
|
|
|
163.3 |
|
Retained earnings |
|
|
410.2 |
|
|
|
336.9 |
|
Accumulated other comprehensive income |
|
|
25.2 |
|
|
|
30.3 |
|
Other equity |
|
|
(1 102.1 |
) |
|
|
(1 102.1 |
) |
Non-controlling interest |
|
|
0.2 |
|
|
|
0.5 |
|
|
|
|
|
|
|
|
Total shareholders equity |
|
|
3 325.2 |
|
|
|
627.3 |
|
|
|
|
|
|
|
|
Total liabilities and shareholders equity |
|
|
5 279.5 |
|
|
|
3 339.8 |
|
|
|
|
|
|
|
|
See accompanying notes that are an integral part of these Consolidated Financial Statements
8
Seawell Limited
Unaudited Consolidated Statements of Cash Flows
for the nine months ended September, 2010 and 2009
(In millions of NOK)
|
|
|
|
|
|
|
|
|
|
|
9 month |
|
|
9 month |
|
|
|
period ended |
|
|
period ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2010 |
|
|
2009 |
|
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
|
Net income/ (loss) |
|
|
72.8 |
|
|
|
132,6 |
|
Adjustments to reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
99.3 |
|
|
|
94,8 |
|
Share-based compensation expense |
|
|
3.0 |
|
|
|
4,8 |
|
Change in pension (ex effect of implementation of FAS 158) |
|
|
(16.4 |
) |
|
|
0,0 |
|
Deferred income tax |
|
|
(9.6 |
) |
|
|
(18,8 |
) |
Unrealized foreign exchange loss (gain) |
|
|
8.6 |
|
|
|
70,4 |
|
Change in long-term receivable |
|
|
3.2 |
|
|
|
1,0 |
|
Changes in other non-current liabilities |
|
|
(0.6 |
). |
|
|
22,2 |
|
Changes in operating assets and liabilities, net of effect of acquisitions |
|
|
|
|
|
|
|
|
Trade accounts receivable and other short-term receivables |
|
|
(264.2 |
) |
|
|
28,4 |
|
Trade accounts payable and other short-term liabilities |
|
|
179.7 |
|
|
|
(222,3 |
) |
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
75.8 |
|
|
|
113,1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
Additions to drilling equipment |
|
|
(95,9 |
) |
|
|
(130,5 |
) |
Additions to asset under construction |
|
|
(11,1 |
) |
|
|
(5,3 |
) |
Sale of rigs, vessels and equipment |
|
|
61,4 |
|
|
|
0,0 |
|
Acquisition of subsidiaries |
|
|
(109,3 |
) |
|
|
(25,1 |
) |
Short term loan to parent |
|
|
(439,0 |
) |
|
|
|
|
Change in restricted cash |
|
|
10,7 |
|
|
|
34,1 |
|
Cash assumed in the purchase of subsidiaries |
|
|
9,9 |
|
|
|
1,3 |
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(573,2 |
) |
|
|
(125,5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
Proceeds from long-term debt |
|
|
12,4 |
|
|
|
29,5 |
|
Repayments of long-term debt |
|
|
(131,8 |
) |
|
|
(19,8 |
) |
Proceeds from issuance of equity, |
|
|
1 852,1 |
|
|
|
0,0 |
|
Issuance costs in connection with issuance of equity |
|
|
(27,1 |
) |
|
|
0,0 |
|
Debt fees paid |
|
|
0,0 |
|
|
|
0,0 |
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
1 705,6 |
|
|
|
9,7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(75,8 |
) |
|
|
28,0 |
|
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 9
|
|
|
|
|
|
|
|
|
|
|
9 month |
|
|
9 month |
|
|
|
period ended |
|
|
period ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2010 |
|
|
2009 |
|
Net increase / (decrease) in cash and cash equivalents |
|
|
1 132,5 |
|
|
|
25,2 |
|
Cash and cash equivalents at beginning of the year |
|
|
236,7 |
|
|
|
224,1 |
|
Cash and cash equivalents at the end of period |
|
|
1 369,2 |
|
|
|
249,3 |
|
|
|
|
|
|
|
|
|
|
Supplementary disclosure of cash flow information |
|
|
|
|
|
|
|
|
Interest paid |
|
|
(40,1 |
) |
|
|
(32,6 |
) |
Taxes paid |
|
|
(42,9 |
) |
|
|
(67,8 |
) |
On August 18, 2010 the Company completed a private placement of NOK 2 654.2 million. A total of NOK
802.1 million in loans to Seadrill was settled as a conversion of debt to equity and has therefore
no cash effect.
See accompanying notes that are an integral part of these Consolidated Financial Statements.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 10
Seawell Limited
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
for the 9 months ended September 30, 2010
(In millions of NOK)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
other |
|
|
|
|
|
|
|
|
|
|
Non- |
|
|
Total |
|
|
|
Share |
|
|
paid-in |
|
|
comprehensive |
|
|
Retained |
|
|
Other |
|
|
controlling |
|
|
shareholders |
|
|
|
Capital |
|
|
capital |
|
|
income |
|
|
earnings |
|
|
equity |
|
|
interest |
|
|
equity |
|
Balance at December 31, 2009 |
|
|
1 198,4 |
|
|
|
163,3 |
|
|
|
30,3 |
|
|
|
336,9 |
|
|
|
(1 102,1 |
) |
|
|
0,5 |
|
|
|
627,3 |
|
Private Placement |
|
|
1 424,0 |
|
|
|
1 230,2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 654,2 |
|
Brokers fee |
|
|
|
|
|
|
(27,1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(27,1 |
) |
Employee stock options issued |
|
|
|
|
|
|
3,0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,0 |
|
Foreign exchange differences |
|
|
|
|
|
|
|
|
|
|
2,2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,2 |
|
Change in unrealized gain on
interest rate swaps |
|
|
|
|
|
|
|
|
|
|
(7,3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,3 |
) |
Non-controlling interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0,4 |
|
|
|
|
|
|
|
|
|
|
|
0,4 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72.8 |
|
|
|
|
|
|
|
(0,4 |
) |
|
|
72.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2010 |
|
|
2 622,4 |
|
|
|
1 369,4 |
|
|
|
25,2 |
|
|
|
410,2 |
|
|
|
(1 102,1 |
) |
|
|
0,1 |
|
|
|
3 325.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes that are an integral part of these Consolidated Financial Statements.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 11
Note 1 General information
Seawell Limited (the Company or Seawell) is a global oilfield service company providing
drilling services and well services, including platform drilling, drilling facility engineering,
modular rigs, well intervention and oilfield technology. The company employs approximately 3 000
skilled and experienced people.
Seawell was incorporated in Bermuda on August 31, 2007 as a wholly owned subsidiary of Seadrill
Limited (Seadrill). Seawell together with its wholly owned subsidiary, Seawell Holding UK
acquired the shares in the entities comprising Seadrill`s Well Service division on October 1, 2007.
The consideration for the shares was NOK 2 413.1 million and has been accounted for as a common
control transaction. As of September 30, 2010 Seawell was owned 52.26% by Seadrill.
As used herein, unless otherwise required by the context, the term Seawell refers to Seawell
Limited and the terms Company, we, Group, our and words of similar import refer to Seawell
and its consolidated subsidiaries for the periods that are consolidated and the combined group for
the period that are combined. The use herein of such terms as group, organisation, we, us, our and
its, or references to specific entities, is not intended to be a precise description of corporate
relationships.
Basis of presentation
The unaudited interim consolidated financial statements are presented in accordance with generally
accepted accounting principles in the United States of America (US GAAP) for interim financial
information. The unaudited interim consolidated financial statements do not include all of the
disclosures required in complete annual financial statements. These interim financial statements
should be read in conjunction with the Companys financial statements as at December 31, 2009. In
the opinion of management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.
The amounts are presented in Norwegian Kroner rounded to the nearest hundred thousand, unless
otherwise stated. The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Future events and their effects cannot be
perceived with certainty. Accordingly, our accounting estimates require the exercise of judgment.
While management believes that the estimates and assumptions used in the preparation of the
consolidated financial statements are appropriate, actual results could differ from those
estimates. Estimates are used for, but are not limited to, determining the following: allowance for
doubtful accounts, recoverability of long-lived assets and intangibles, useful lives used in
depreciation and amortization, income taxes and valuation allowances. The accounting estimates used
in the preparation of the consolidated financial statements may change as new events occur, as more
experience is acquired, as additional information is obtained and as our operating environment
changes.
Significant accounting policies
The accounting policies adopted in the preparation of the unaudited interim financial statements
are consistent with those followed in the preparation of the Companys annual consolidated
financial statements and accompanying notes for the year ended December 31, 2009.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 12
New Accounting Pronouncements
In June 2009, the Financial Accounting Standards Board (FASB) issued authoritative guidance that
eliminates the qualifying special purpose entity concept, changes the requirements for
derecognizing financial assets and requires enhanced disclosures about transfers of financial
assets. The guidance also revises earlier guidance for determining whether an entity is a variable
interest entity, requires a new approach for determining who should consolidate a variable interest
entity, changes when it is necessary to reassess who should consolidate a variable interest entity,
and requires enhanced disclosures related to an enterprises involvement in variable interest
entities. We adopted the guidance effective January 1, 2010, which did not have an effect on our
financial statements.
In October 2009, the FASB issued authoritative guidance that amends earlier guidance addressing the
accounting for contractual arrangements in which an entity provides multiple products or services
(deliverables) to a customer. The amendments address the unit of accounting for arrangements
involving multiple deliverables and how arrangement consideration should be allocated to the
separate units of accounting, when applicable, by establishing a selling price hierarchy for
determining the selling price of a deliverable. The selling price used for each deliverable will be
based on vendor-specific objective evidence if available, third-party evidence if vendor-specific
objective evidence is not available, or estimated selling price if neither vendor-specific nor
third-party evidence is available. The amendments also require that arrangement consideration be
allocated at the inception of an arrangement to all deliverables using the relative selling price
method. The guidance is effective for fiscal years beginning on or after June 15, 2010, with
earlier application permitted. We are currently evaluating the effects that the guidance may have
on our financial statements.
In January 2010, the FASB issued authoritative guidance that changes the disclosure requirements
for fair value measurements. Specifically, the changes require a reporting entity to disclose
separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value
measurements and describe the reasons for the transfers. The changes also clarify existing
disclosure requirements related to how assets and liabilities should be grouped by class and
valuation techniques used for recurring and nonrecurring fair value measurements. We adopted the
guidance in the first quarter 2010, which did not have an impact on our financial position, results
of operations or cash flows.
In February 2010, the FASB amended guidance on subsequent events to alleviate potential conflicts
between FASB guidance and SEC requirements. Under this amended guidance, SEC filers are no longer
required to disclose the date through which subsequent events have been evaluated in originally
issued and revised financial statements. This guidance was effective immediately and we adopted
these new requirements in the first quarter 2010. The adoption of this guidance did not have an
impact on our financial statements.
Note 2 Segment information
The Company provides drilling services and well services, including platform drilling, drilling
facility engineering, modular rigs, well intervention and oilfield technology to the offshore oil
and gas industry. Seawells reportable segments consist of the primary services it provides.
Although Seawells segments are generally influenced by the same economic factors, each represents
a distinct service to the oil and gas industry. There have not been any intersegment sales during
the periods presented. Segment results are evaluated based on operating income. The accounting
principles for the segments are the same as for the Companys combined and consolidated financial
statements. Indirect general and administrative expenses are allocated to each segment based on
estimated use.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 13
The split of our organization and aggregation of our business into two segments was based on
differences in management structure and reporting, economic characteristics, customer base, asset
class and contract structure. As of September 30, 2010, the Company operates in the following two
segments:
Drilling Services: The Company performs platform drilling, drilling facility engineering and
modular rig activities on several fixed installations in the North Sea.
Well Services: The Company performs various well intervention and oilfield technology services,
including but not limited to conveying of logging, perforation, zonal isolation, well clean up,
leak detection services and fishing.
Segment results are evaluated on the basis of operating profit, and the information given below is
based on information used for internal reporting. The accounting principles for the segments are
the same as for the Companys consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three month |
|
|
For the nine month |
|
|
|
period ended |
|
|
period ended |
|
|
|
September 30, |
|
|
September 30, |
|
Revenues from external customers |
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
(in millions of NOK) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling Services |
|
|
901.2 |
|
|
|
763.7 |
|
|
|
2 549.8 |
|
|
|
2 479.3 |
|
Well Services |
|
|
168.7 |
|
|
|
149.3 |
|
|
|
515.9 |
|
|
|
483.7 |
|
Total operating revenues |
|
|
1 069.9 |
|
|
|
913.0 |
|
|
|
3 065.7 |
|
|
|
2 963.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of NOK) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling Services |
|
|
13.0 |
|
|
|
14.3 |
|
|
|
39.8 |
|
|
|
40.2 |
|
Well Services |
|
|
19.1 |
|
|
|
19.2 |
|
|
|
59.5 |
|
|
|
54.6 |
|
Total depreciation and amortization |
|
|
32.1 |
|
|
|
33.5 |
|
|
|
99.3 |
|
|
|
94.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income - net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of NOK) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling Services |
|
|
74.3 |
|
|
|
74.5 |
|
|
|
231.4 |
|
|
|
213.4 |
|
Well Services |
|
|
24.3 |
|
|
|
23.2 |
|
|
|
72.3 |
|
|
|
68.7 |
|
Operating income |
|
|
98.6 |
|
|
|
97.7 |
|
|
|
303.7 |
|
|
|
282.1 |
|
Unallocated items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial items |
|
|
(137.3 |
) |
|
|
(82.1 |
) |
|
|
(161.5 |
) |
|
|
(101.6 |
) |
Income taxes |
|
|
(18.1 |
) |
|
|
(2.8 |
) |
|
|
(69.4 |
) |
|
|
(47.9 |
) |
Net income |
|
|
(56.7 |
) |
|
|
12.8 |
|
|
|
72.8 |
|
|
|
132.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
|
|
|
|
|
|
Total assets |
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
(in millions of NOK) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling Services |
|
|
3 284.9 |
|
|
|
1 924.5 |
|
|
|
|
|
|
|
|
|
Well Services |
|
|
1 994.6 |
|
|
|
1 415.3 |
|
|
|
|
|
|
|
|
|
Total assets |
|
|
5 279.5 |
|
|
|
3 339.8 |
|
|
|
|
|
|
|
|
|
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three month |
|
|
For the nine month |
|
|
|
period ended |
|
|
period ended |
|
|
|
September 30, |
|
|
September 30, |
|
Capital expenditures |
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
(in millions of NOK) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling Services |
|
|
26.2 |
|
|
|
17.7 |
|
|
|
59.5 |
|
|
|
101.0 |
|
Well Services |
|
|
31.7 |
|
|
|
11.9 |
|
|
|
56.4 |
|
|
|
68.9 |
|
Total expenditures |
|
|
57.9 |
|
|
|
29.6 |
|
|
|
115.9 |
|
|
|
169.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total goodwill |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling |
|
|
|
|
|
|
|
(In millions of NOK) |
|
Services |
|
|
Well Services |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Seadrills purchase of Smedvig |
|
|
650.1 |
|
|
|
354.8 |
|
|
|
1 004.9 |
|
Balance at December 31, 2006 |
|
|
650.1 |
|
|
|
354.8 |
|
|
|
1 004.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of Wellbore Solutions AS |
|
|
|
|
|
|
15.2 |
|
|
|
15.2 |
|
Balance at December 31, 2007 |
|
|
650.1 |
|
|
|
370.0 |
|
|
|
1 020.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of Noble Corporations North Sea
Platform Division |
|
|
156.5 |
|
|
|
|
|
|
|
156.5 |
|
Acquisition of Peak Well Solutions AS |
|
|
|
|
|
|
309.4 |
|
|
|
309.4 |
|
Acquisition of TecWel AS |
|
|
|
|
|
|
119.1 |
|
|
|
119.1 |
|
Balance at December 31, 2008 |
|
|
806.6 |
|
|
|
798.5 |
|
|
|
1 605.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment of purchase price Peak Well Solutions AS |
|
|
|
|
|
|
(2.3 |
) |
|
|
(2.3 |
) |
Exchange rate fluctuations on goodwill measured in
foreign currency |
|
|
(13.0 |
) |
|
|
|
|
|
|
(13.0 |
) |
Balance at December 31, 2009 |
|
|
793.6 |
|
|
|
796.2 |
|
|
|
1 589.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of Viking Intervention Technology AS |
|
|
|
|
|
|
21.4 |
|
|
|
21.4 |
|
Acquisition of RIS and ROMEG |
|
|
26.9 |
|
|
|
|
|
|
|
26.9 |
|
Final settlement Peak Well Solutions AS |
|
|
|
|
|
|
3.8 |
|
|
|
3.8 |
|
Exchange rate fluctuations on goodwill measured in
foreign currency |
|
|
0.1 |
|
|
|
|
|
|
|
0.1 |
|
Balance at September 30, 2010 |
|
|
820.7 |
|
|
|
821.4 |
|
|
|
1 642.1 |
|
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 15
Note 3 Taxes
The income taxes for the period ended September 30, 2010 differed from the amount computed by
applying the statutory income tax rate of 0% as follows:
|
|
|
|
|
|
|
|
|
|
|
9 month |
|
|
9 month |
|
|
|
period ended |
|
|
period ended |
|
|
|
September 30, |
|
|
September 30, |
|
(in millions of NOK) |
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
Income taxes related to other countries |
|
|
|
|
|
|
|
|
Norway |
|
|
56.1 |
|
|
|
35.0 |
|
UK |
|
|
6.2 |
|
|
|
9.7 |
|
Other |
|
|
7.1 |
|
|
|
3.2 |
|
|
|
|
|
|
|
|
Total |
|
|
69.4 |
|
|
|
47.9 |
|
|
|
|
|
|
|
|
In the consolidated financial statement ended September 30, 2010 the Company has recognized NOK
67.7 million as loss due to foreign exchange loss in Bermuda, which has a statutory income tax rate
of 0%.
The Companys operations in the UK, US, Brazil, Norway and Denmark are taxable.
Note 4 Earnings per share
The computation of basic EPS is based on the weighted average number of shares outstanding during
the period. Diluted EPS includes the effect of the assumed conversion of potentially dilutive
instruments.
There is no difference in the components of the numerator for the calculation of basic and diluted
EPS
The components of the denominator for the calculation of basic and diluted EPS are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
September 30, |
|
|
September 30, |
|
In thousand |
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding |
|
|
162,571 |
|
|
|
110,001 |
|
|
|
127,524 |
|
|
|
110,001 |
|
|
|
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding |
|
|
164,871 |
|
|
|
10,267 |
|
|
|
129,824 |
|
|
|
110,267 |
|
Effect of dilutive share options |
|
|
2,300 |
|
|
|
267 |
|
|
|
2,300 |
|
|
|
267 |
|
The Company does not have securities that could potentially dilute basic EPS in the future that
were not included in the computation of diluted.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 16
Note 5 Other financial items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
September 30, |
|
|
September 30, |
|
(In millions of NOK) |
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain (loss) |
|
|
(107.9 |
) |
|
|
(59.3 |
) |
|
|
(86.8 |
) |
|
|
(29.2 |
) |
Other items |
|
|
(12.0 |
) |
|
|
(0.9 |
) |
|
|
(12.8 |
) |
|
|
(4.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other financial items |
|
|
(119.9 |
) |
|
|
(60.2 |
) |
|
|
(99.6 |
) |
|
|
(33.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 6 Drilling equipment and other fixed asset
Drilling equipment
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
(In millions of NOK) |
|
2010 |
|
|
2009 |
|
Cost |
|
|
813.5 |
|
|
|
745.1 |
|
Accumulated depreciation |
|
|
(511.4 |
) |
|
|
(449.0 |
) |
|
|
|
|
|
|
|
Net book value |
|
|
302.1 |
|
|
|
296.1 |
|
|
|
|
|
|
|
|
Depreciation and amortization expense was NOK 63.8 million for the nine months ended September 30,
2010 and NOK 62.2 million for the nine months end September 30, 2009. The depreciation and
amortization expense for the three months ended September 30, 2010 and September 30, 2009 was NOK
20.7 million and NOK 21.3 million, respectively.
Other fixed assets
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
(In millions of NOK) |
|
2010 |
|
|
2009 |
|
Cost office equipment, furniture, fittings and motor vehicles |
|
|
117.1 |
|
|
|
137.1 |
|
Accumulated depreciation |
|
|
(40.1 |
) |
|
|
(28.3 |
) |
|
|
|
|
|
|
|
Net book value |
|
|
77.0 |
|
|
|
108.8 |
|
|
|
|
|
|
|
|
Depreciation and amortization expense was NOK 15.7 million the nine months ended September 30, 2010
and NOK 8.8 million for the nine months ended September 30, 2009. The depreciation and amortization
expense for the three months ended September 30, 2010 and September 30, 2009 was NOK 5.9 million
and NOK 4.3 million, respectively.
Seawell sold Sandsliåsen 59 AS July 1, 2010 to Rasmussen Eiendom AS. Seawell will continue to
utilize the premises under a 10 year lease with Rasmussen, paying rental charges amounting to mNOK
4.5 yearly. The Company has recognized a gain of NOK 13.9 million which will be amortized over the
life of the lease.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 17
Note 7 Assets under construction Modular Rig
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
(In millions of NOK) |
|
2010 |
|
|
2009 |
|
Cost |
|
|
178.1 |
|
|
|
167.0 |
|
Accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value |
|
|
178.1 |
|
|
|
167.0 |
|
|
|
|
|
|
|
|
Included in capitalized cost of asset under construction are interest expenses and loan related
cost of NOK 4.6 million for the period ended September 30, 2010 (NOK 5.3 million for the year ended
December 31, 2009).
Note 8 Intangible assets
The following table discloses the Companys intangible assets:
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
(In millions of NOK) |
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
Intangible assets |
|
|
|
|
|
|
|
|
Cost |
|
|
258.7 |
|
|
|
174.9 |
|
Accumulated depreciation and amortization |
|
|
(57.7 |
) |
|
|
(39.2 |
) |
|
|
|
|
|
|
|
Net book value |
|
|
201.0 |
|
|
|
135.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization year to date |
|
|
18.5 |
|
|
|
23.5 |
|
|
|
|
|
|
|
|
The cost at September 30, 2010 of NOK 258.7 million consists of identified technology of NOK 89.1
million , and customer relationships of NOK 169.6 million (including NOK 79.3 million acquired
since the year end). The remaining average amortization period as of September 30, 2010 for the
intangible assets is 74 months (88 months for technology and 63 months for customer relationships).
Note 9 Goodwill
In the nine month period ended September 30, 2010 there was no impairment losses. Goodwill balance
and changes in the carrying amount of goodwill are as follows:
|
|
|
|
|
|
|
|
|
|
|
Period ended |
|
|
Year ended |
|
|
|
September 30, |
|
|
December 31, |
|
(In millions of NOK) |
|
2010 |
|
|
2009 |
|
Net book balance at beginning of period |
|
|
1 589.8 |
|
|
|
1 605.2 |
|
Goodwill acquired during the period |
|
|
52.2 |
|
|
|
|
|
Impairment losses |
|
|
|
|
|
|
|
|
Currency adjustments |
|
|
0.1 |
|
|
|
(13.0 |
) |
Other adjustments |
|
|
|
|
|
|
(2.4 |
) |
|
|
|
|
|
|
|
Net book balance at end of period |
|
|
1642.1 |
|
|
|
1 589.8 |
|
|
|
|
|
|
|
|
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 18
The goodwill acquired during 2010 represents the excess of purchase price over the fair value of
tangible and identifiable intangible asset acquired, which represents primarily intangible assets
which are not separately identifiable.
Note 10 Long-term interest bearing debt and interest expenses
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
((in millions of NOK) |
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
MNOK 1 500 Revolving Credit facility |
|
|
1 111.4 |
|
|
|
1214.1 |
|
Other loans and capital lease liability |
|
|
31.5 |
|
|
|
34.4 |
|
Subordinated loan from parent |
|
|
0.0 |
|
|
|
613.6 |
|
|
|
|
|
|
|
|
Total loans and capital lease liability |
|
|
1 142.9 |
|
|
|
1 862.1 |
|
|
|
|
|
|
|
|
Less: current portion |
|
|
(1 120.8 |
) |
|
|
(260.8 |
) |
|
|
|
|
|
|
|
Long-term portion of interest bearing debt |
|
|
22.1 |
|
|
|
1 601.3 |
|
|
|
|
|
|
|
|
NOK 1,500 million Revolving Credit Facility Agreement
On 7 September 2010, Seawell entered into a NOK 1,500 million Revolving Credit Facility Agreement
with Fokus Bank, the Norwegian branch of Danske Bank AS, for general corporate purposes, replacing
the December 2007 NOK 1,500 million Senior Bank Debt Facility Agreement outstanding as per second
quarter 2010, capital expenditures, working capital and the issuance of guarantees to support
contract performance obligations and other operating requirements. The facility is divided into two
tranches. The first tranche, Tranche A, is for NOK 1,215 million, while the second tranche, Tranche
B, is for NOK 285 million. Both tranches have a final maturity date of 12 months from the date of
signing of the agreement. The interest rate of the tranches is the aggregate of LIBOR, NIBOR or
EURIBOR, plus 2.50%, plus mandatory costs, if any. The Revolving Credit Facility Agreement entered
contains events of default which include payment defaults, breach of financial covenants, breach of
other obligations, breach of representations and warranties, insolvency, illegality,
unenforceability, conditions subsequent, curtailment of business, claims against an obligors
assets, appropriation of an obligors assets, cross-defaults to other indebtedness in excess of NOK
5 million,, material adverse effect, and material litigation. As of the end of the third quarter,
approximately NOK 1,111.4 million of the facility had been drawn
USD 550 million multicurrency term and Revolving Credit Facility Agreement
On November 12, 2010 Seawell executed a loan agreement for a new five year USD 550 million
multicurrency term and revolving facilities agreement with a syndicate of banks.
The purpose of the new facilities is to refinance Seawells existing NOK 1,500 million Revolving
Credit Facility Agreement of 7 September, 2010, general corporate purposes, to partially finance
the cash option to Allis-Chalmers shareholders if exercised, and to refinance existing
indebtedness in Allis-Chalmers and its subsidiaries.
Repayment of subordinated loan to parent
Subsequent to the private placement Seawell repaid the subordinated loan and short term loan to
Seadrill Limited
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 19
The outstanding debt as of September 30, 2010 is repayable as follows:
|
|
|
|
|
(in millions of NOK) |
|
|
|
|
Year ending December 31 |
|
|
|
|
2010 |
|
|
1 113.9 |
|
2011 |
|
|
11.1 |
|
2012 |
|
|
17.9 |
|
|
|
|
|
Total debt |
|
|
1 142.9 |
|
|
|
|
|
The Company has miscellaneous covenants in its loan agreements. The facility contains the following
main covenants:
|
|
|
The Leverage ratio shall not be higher than 3.0 |
|
|
|
The Equity ratio shall be at least 25% |
As of September 30, 2010, the Company is in compliance with all of the covenants under its
long-term facilities.
Interest rate swap agreement
The Company has entered into an interest rate swap agreement, securing the interest rate on NOK 750
million of the credit facility for 3.5 years. The agreement was entered into in mid March 2009,
with the commencement of the hedging period and start up of hedging accounting by end of April
2009. The fair value of the swaps as of September 30, 2010 was a liability of NOK 12.8 million and
is included within other non current liabilities.
Note 11 Share capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2010 |
|
|
December 31, 2009 |
|
All shares are common shares of $2.00 par value each |
|
Shares |
|
|
NOKmillion |
|
|
Shares |
|
|
NOKmillion |
|
Authorized share capital |
|
|
600 000 000 |
|
|
|
7 012.8 |
|
|
|
300 000 000 |
|
|
|
3 241.0 |
|
Issued, outstanding and fully paid share capital |
|
|
225 400 050 |
|
|
|
2 622.4 |
|
|
|
110 000 050 |
|
|
|
1 198.35 |
|
The authorized share capital has been translated at the rate in effect on October 1, 2007, the date
of incorporation.
The Company was incorporated on August 31, 2007 and 50 ordinary shares of par value US$2.00 each
were issued. In October 2007 there was one share issue of 80 000 000 shares at NOK 13.75 per share
and one issue of 20 000 000 shares at NOK 13.75 per share. At the end of December 2007 a total of
100 000 050 shares of par value US$ 2.00 each were issued and outstanding.
In April 2008 there was an equity issue of 10 000 000 shares at NOK 19.50 per share.
There were no new shares issued in 2009.
In August 2010 Seawell completed a private placement of 115.4 million shares at a share price of
NOK 23 pr share, amounting to proceeds of NOK 2 627.1 million net of brokers fee of NOK 27.1
million.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 20
Note 12 Related party transactions
The Company transacts business with the following related parties, being companies in which our
parent companys principal shareholders Hemen Holding Ltd and Farahead Investments Inc (hereafter
jointly referred to as Hemen) and companies associated with Hemen have a significant interest:
Seadrill Limited (Seadrill)
Frontline Management (Bermuda) Limited (Frontline)
Seawell was established at the end of the third quarter of 2007, as a spin-off of Seadrills Well
Service division. Seawell together with its wholly owned subsidiary, Seawell Holding UK acquired
the shares in the Seadrill Well Service division entities on October 1, 2007. The consideration for
the shares was NOK 2 413.1 million. The acquisition has been accounted for as a common control
transaction with the asset and liabilities acquired recorded by Seawell at historical carrying
value of Seadrill. The excess of consideration of the net asset and liabilities acquired has been
recorded as adjustment to equity of NOK 1 058.6 million. The Companys acquisition of companies
comprising the previous Seadrill well service division was financed with a subordinated loan from
Seadrill amounted to NOK 613.6 million as of December 31, 2009. As of September 30, 2010, the
subordinated loan was fully paid as a consequence of conversion of debt to equity in connection
with the Private Placement held on August 23, 2010. The interest on the subordinated loan is added
to the principal and is charged to the income statement item Interest expense as it does not
merit separate disclosure. Accrued interest on the subordinated loan is NOK 25 million in 2010.
As of September 30, 2010, all short term loans to Seadrill is paid as a consequence of conversion
of debt to equity in connection with the private placement on 23. August 2010. (NOK 191.1 million
at December 31, 2009) The interest rate on the short term loans is 3 months NIBOR + 1.25 % and
interest accreted during 2010 is NOK 4.517 million.
Seadrill Management AS, a company within the Seadrill group has charged the Company a fee of NOK 0
million and NOK 1.6 million for these services in the three months and nine months ended September
30, 2010, respectively, and NOK 11.3 million in 2009 .Frontline provides management support and
administrative services for the Company, and charged the Company fees of NOK 0 million and NOK 0.7
million for these services in the three months and nine months ended September 30, 2010,
respectively, and NOK 0.2 million and NOK 0.2 million in the three months and nine months ended
September 30, 2009, respectively. NOK 0 million in the consolidated statement of operations were
included within other payables as at September 30, 2010 and December 31, 2009.
These amounts are included in General and administrative expenses, as they do not merit separate
disclosure.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 21
Note 13 Fair value of financial instruments
The carrying value and estimated fair value of the Companys financial instruments at September 30,
2010 and December 31, 2009 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2010 |
|
|
December 31, 2009 |
|
|
|
|
|
|
|
Carrying |
|
|
|
|
|
|
Carrying |
|
(In millions of NOK) |
|
Fair value |
|
|
value |
|
|
Fair value |
|
|
value |
|
Non-Derivatives |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
1 369.2 |
|
|
|
1 369.2 |
|
|
|
236.7 |
|
|
|
236.7 |
|
Restricted cash |
|
|
41.1 |
|
|
|
41.1 |
|
|
|
51.8 |
|
|
|
51.8 |
|
Current portion of long term
floating rate debt |
|
|
1 120.8 |
|
|
|
1 120.8 |
|
|
|
260.8 |
|
|
|
260.8 |
|
Long term interest bearing debt |
|
|
22.1 |
|
|
|
22.1 |
|
|
|
1 601.3 |
|
|
|
1 601.3 |
|
Derivatives |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate Swap agreements |
|
|
12.8 |
|
|
|
12.8 |
|
|
|
5.5 |
|
|
|
5.5 |
|
The above financial assets and liabilities are measured at fair value on a recurring basis as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value measurements at reporting date using |
|
|
|
|
|
|
|
Quoted |
|
|
|
|
|
|
|
|
|
|
|
|
|
Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
in Active |
|
|
Significant |
|
|
|
|
|
|
|
|
|
|
Markets for |
|
|
Other |
|
|
Significant |
|
|
|
|
|
|
|
Identical |
|
|
Observable |
|
|
Unobservable |
|
|
|
September 30, |
|
|
Assets |
|
|
Inputs |
|
|
Inputs |
|
(in millions of $) |
|
2010 |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
1 369.2 |
|
|
|
1 369.2 |
|
|
|
|
|
|
|
|
|
Restricted cash |
|
|
41.1 |
|
|
|
41.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
1 410.3 |
|
|
|
1 410.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long term debt |
|
|
1 120.8 |
|
|
|
1 120.8 |
|
|
|
|
|
|
|
|
|
Long-term portion of floating rate debt |
|
|
22.1 |
|
|
|
22.1 |
|
|
|
|
|
|
|
|
|
Interest rate swap contracts short term payables |
|
|
12.8 |
|
|
|
|
|
|
|
12.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
1 155.7 |
|
|
|
1 142.9 |
|
|
|
12.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company has used a variety of methods and assumptions, which are based on market conditions and
risks existing at the time, to estimate the fair value of the Companys financial instruments as of
September 30, 2010 and December 31, 2009. For certain instruments, including cash and cash
equivalents, receivables and accounts payable, it is assumed that the carrying amount approximated
fair value due to the short-term maturity of those instruments.
The fair value of the current portion of long-term debt is estimated to be equal to the carrying
value, since it is repayable within twelve months.
The fair value of the long-term portion of floating rate debt is estimated to be equal to the
carrying value since it bears variable interest rates, which are reset on a quarterly basis. This
debt is not freely tradable and cannot be purchased by the Company at prices other than the
outstanding balance plus accrued interest
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 22
The fair values of interest rate swaps are calculated using well-established independent valuation
techniques applied to contracted cash flows and LIBOR and NIBOR interest rates as at September 30,
2010 and December 31, 2009.
Note 14 Commitments and contingencies
Purchase Commitments
In February 2008, Seawell ordered a modularized drilling rig (Well Service Unit). The estimated
capital expenditure for the unit is some EUR 34 million (NOK 271 million) with delivery scheduled
late in the fourth quarter 2010 or early in the first quarter 2011. As of September 30, 2010
Seawell has paid EUR 17.8 million (NOK 155.5 million) to the builder.
Legal Proceedings
The company had no legal proceedings as at September 30, 2010.
Note 15 Acquisitions and sales
Acquisition of Viking Intervention Technology AS
On April 30, 2010 Seawell announced the acquisition of Viking Intervention Technology AS for a
consideration of NOK 50 million. The purchase price has been calculated to NOK 70 million taking
into account certain contingent considerations. Viking Intervention Technology is a company
developing an integrated carbon cable intervention system and was acquired for its complimentary
product portfolio. This acquisition has had the effect on the financial statements of the Company
as follows:
The purchase price has been allocated as follows:
|
|
|
|
|
|
|
Viking |
|
|
|
Intervention |
|
(in NOK million) |
|
Technology AS |
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
|
0.1 |
|
Accounts receivable |
|
|
2.8 |
|
Other current asset |
|
|
4.8 |
|
Total current assets |
|
|
7.7 |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
Drilling equipment and other fixed asset |
|
|
4.7 |
|
Other intangible asset |
|
|
70.1 |
|
Goodwill |
|
|
21.3 |
|
Total non-current assets |
|
|
96.1 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Other current liabilities |
|
|
6.4 |
|
Total current liabilities |
|
|
6.4 |
|
|
|
|
|
|
Deferred taxes |
|
|
18.3 |
|
Other non-current liabilities |
|
|
9.3 |
|
Total non-current liabilities |
|
|
27.6 |
|
|
|
|
|
|
Total purchase price (fair value) |
|
|
70.0 |
|
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 23
Acquisition of Rig Inspection Services Limited
On August 5, 2010 Seawell announced the signing of a Sale/Purchase agreement with the shareholders
of Rig Inspection Services Limited (RIS), a private company based in Singapore and Australia, for a
price of NOK 55.3 million, where NOK 20.8 million is considered contingent based on financial
performance over the next two years. The addition of RIS to Seawell compliments the Seawell
drilling facility engineering capabilities and allows Seawell to offer its clients a very broad
range of inspection services on rigs, risers and drilling equipment on a global basis.
The purchase price has been allocated as follows:
|
|
|
|
|
|
|
Rig Inspection |
|
(in NOK million) |
|
Services Limited |
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
|
3.6 |
|
Accounts receivable |
|
|
14.8 |
|
Other current asset |
|
|
1.1 |
|
Total current assets |
|
|
19.5 |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
Drilling equipment and other fixed asset |
|
|
0.9 |
|
Other intangible asset |
|
|
13.8 |
|
Goodwill |
|
|
26.9 |
|
Total non-current assets |
|
|
41.6 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable |
|
|
3.3 |
|
Other current liabilities |
|
|
2.5 |
|
Total current liabilities |
|
|
5.8 |
|
|
|
|
|
|
Total purchase price (fair value) |
|
|
55.3 |
|
Note 16 Subsequent Events
Acquisition of Allis- Chalmers Energy Inc
On August 12, 2010 Seawell announced the approval of a definitive merger agreement with
Allis-Chalmers Energy Inc. (ALY), an NYSE listed energy group. The planned transaction involves
Seawell being the accounting and legal acquirer of ALY with a preliminary purchase value of USD
$527.5 million (NOK 3 074.4 million). The principal reason for the acquisition is to expand the
Companys drilling services offerings and to reach new geographic markets.
The preliminary purchase price includes both cash and equity payments to the shareholders of ALY.
The acquisition will involve Seawell acquiring 100% of the share capital of ALY in exchange for
Seawell shares, in a ratio of 1.15 Seawell shares to ALY shares, or a cash settlement of USD$4.25
per share. Elections from ALY shareholders are not yet due.
As neither the purchase price nor the method of settlement is yet fixed, no accounting disclosures
are included within these financial statements. The Company is unable to disclose the purchase
price calculation and its effect upon these financial statements as it is not fixed until ALY
shareholder elections are made, and is unable to disclose the fair value adjustments expected to
arise on acquisition and their effect upon these financial statements as the final purchase price
is not yet known.
The finalization of the merger is dependent upon approval by the shareholders of ALY.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
Page 24
Change in the Board of Directors
Mr Alf C. Thorkildsen, CEO of Seadrill Management AS, has with effect from November 1, 2010
resigned from the board of Seawell Limited. The board has, as his substitute, appointed Mr. Fredrik
Halvorsen to the board. Mr. Halvorsens election will be put to Seawell Limiteds shareholders in
the next general meeting of the company for confirmation.
Mr. Halvorsen has previously worked for Tandberg ASA and McKinsey & Co. in Southeast Asia. Mr.
Halvorsen is currently employed by Frontline Corporate Services Ltd.
Alf C. Thorkildsen will continue to be available to the Company in a function as an alternate
director. Mr. Thorkildsen is the CEO of Seadrill Management AS.
New loan agreement
On November 12, 2010 Seawell executed a loan agreement for a new five year USD 550 million
multicurrency term and revolving facilities agreement with a syndicate of banks.
The purpose of the new facilities is to refinance Seawells existing NOK 1,500 million Revolving
Credit Facility Agreement of 7 September, 2010, general corporate purposes, to partially finance
the cash option to Allis-Chalmers shareholders if exercised, and to refinance existing
indebtedness in Allis-Chalmers and its subsidiaries.
Listing of Seawell Ltd on Oslo Stock Exchange
On November 26, 2010 Seawell Limited was listed on the Oslo Stock Exchange, and is traded under the
ticker SEAW.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN.
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