SD Standard Drilling in good shape for 2018Company News // November 24, 2017
SD Standard Drilling says it had a positive EBITDA of US$0.46 million in the third quarter of 2017 from operation of platform supply vessels (PSVs).
"The company has a satisfactory short-term contract coverage for its fleet of PSVs, and will leverage Standard Drilling's sound financial position with no debt to take advantage of the expected upturn in the market from the spring of 2018," the company said.
"Standard Drilling is a pure investment company and does not consolidate our subsidiaries in our financial accounts. However, we had a PSV utilisation of over 90% in the third quarter and generated a positive EBITDA from our underlying operations. We have a satisfying contract coverage for the winter for our vessels and is in a good position with zero debt to take advantage of any investment opportunity that may appear," said Martin Nes, Chairman of the Board of Standard Drilling.
Standard Drilling reported an operating loss of US$5.8 million in the third quarter of 2017 (Q3 16 -0.1) following negative fair value changes of US$6.6 million.
Standard Drilling measures its investments in PSVs based on estimates from brokers.Revenues and EBITDA from chartering out the vessels are not consolidated into, nor reflected in the financial statements.
The company had an underlying positive EBITDA in the third quarter of US$0.54 million from three fully-owned large PSVs. Including a 25.53% ownership in PSV Opportunity III the group netted a positive EBITDA of 0.46 million.
"After closing the quarter we acquired additional two STX Brevik-built PSV vessels for an attractive en-bloc price of US$22.2 million. To finance the vessels, built in 2009 and 2010, Standard Drilling raised approximately NKr 200 million through an equity offering with solid support from the market," Mr Nes said.
Following the acquisition of the vessels, Standard Drilling owns 100% of five large-size modern PSVs. In addition, the company has invested in 13 mid-size PSVs, bringing the total fleet of partly and fully owned vessels to 18 PSVs.
"The PSV market in the North Sea Sector will be difficult in the coming winter, but the company expects that there will be an upturn in the market from the spring of 2018," said Mr Nes. "With our five larger PSVs trading and with a satisfying contract coverage for the winter for the part-owned vessels, the company is well positioned to take part in the potential upturn.
"We have a sound financial position and are in a good position to take advantage of any investment opportunity that may appear. This includes, but is not limited to, asset play or investment directly in other companies."