Standard Drilling Sells Vessel for $10MM+

Oil & Gas

S.D. Standard Drilling Plc. (OSE: SDSD) has announced that it has entered into a memorandum of agreement to sell the Standard Princess vessel for $10.3 million.

The name of the buyer was not disclosed by the company. The sale of the vessel will result in a gain for Standard Drilling of gross $2.3 million, compared to the book value at the end of the third quarter of 2021, the company highlighted. Proceeds from the vessel and any future divestments of the offshore fleet will be directed towards more liquid investments within Standard Drilling’s core sectors, the company noted.

“Standard Drilling has transitioned its focus to more diversified investments within the energy, transportation and commodities,” Martin Nes, the chairman of Standard Drilling, said in a company statement.  

“The sale of Standard Princess is in line with the new strategy and gives Standard Drilling increased flexibility to pursue other investment opportunities,” Nes added in the statement.

Standard Drilling outlined that the sale will further strengthen its cash balance and investment capacity. The company said it has already received a 10 percent deposit of the purchase price and revealed that the transaction is expected to be completed within January 2022.

Following the sale of the Standard Princess, Standard Drilling will control, directly and indirectly, a fleet of seven platform supply vessels.

Earlier this month, Standard Drilling announced the sale of its 33.3 percent ownership in the VLCC Gustavia S, “following the updated company strategy”. The transaction values the vessel at $93 million, where Standard Drilling will receive net proceeds of $14.1 million for its equity stake in the vessel and book a loss of $0.8 million in the third quarter of 2021, Standard Drilling highlighted.

Proceeds from the VLCC will be directed towards more liquid investments within Standard Drilling’s core sectors, the company noted in a statement at the time.

“Over the last few years, the combination of low commodity prices, ESG concerns and uncertainty around long-term demand has triggered an abrupt stop to investments in the fossil sector,” Nes said in a company statement at the time.

“In fact, today many of these companies have an implied cost of equity in excess of 25 percent, making any new investments prohibited by the capital markets. These dynamics, coupled with the long decarbonization path we now embark on, sets the stage for a commodity super-cycle that could last three to five years in our view,” he added in the statement.

Back in August, the company announced that it had completed a deal to sell the Standard Olympus PSV for $7.5 million. Through its subsidiary, Standard Olympus AS, the company received the transaction amount in full.

Founded in 2010, Standard Drilling is an investment company headquartered in Cyprus and listed on the Oslo Stock Exchange. The business holds a focused investment portfolio and a fleet of PSVs.

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