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UMW shedding stake in 43-year-old offshore drilling rig

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Malaysian offshore driller UMW Drilling will sell half of the ownership in the Naga 1 semi-submersible rig to Japan Drilling Company (JDC) transferring the ownership fully to the Japanese company.

UMW Drilling’s parent firm UMW Oil & Gas said in a Bursa Malaysia filing that the companies had reached a deal on Friday, Apri 28.

UMW and JDC each own 50 percent of the Naga 1 rig, under a rig co-owning agreement between the two from March 2005.

To purchase the remaining stake in the rig, JDC will have to pay half of the rig’s fair market value of $3,306,686, meaning that the proposed consideration for 50 percent of the Naga 1 is $1,653,343.

JDC will settle the disposal consideration by way of set off against the amount due to UMW and will purchase the rig on an as is where is basis.

UMW added that the completion date of the proposed sale would be May 9, 2017. The company also said that, in the current oil price environment, the sale was aligned with UMW’s strategy to reduce costs deriving from high maintenance costs and capital expenditure of the Naga 1 rig.

UDC’s original cost of investment in the Mitsubishi-designed propulsion-assisted semi-submersible Naga 1 drilling rig was $17,000,000 in 2005. It was constructed at Hiroshima Shipyard & Engine Works by Mitsubishi Heavy Industries and commissioned in July 1974. It was enhanced and upgraded in October 2012.


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