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TTA offshore services subsidiary Mermaid continues strong turnaround with significant contracts

Back Nov 22, 2012

Bangkok, Thailand, 22 Nov 2012 – Thoresen Thai Agencies Public Company Limited (“TTA”) announced today three key deals for its 57.14% owned subsidiary, Mermaid Maritime Public Company Limited (“Mermaid”). Mermaid is a Singapore-listed leading provider of subsea and drilling services for the offshore oil and gas industry.

In a deal concluded last month, a new joint venture between Mermaid and Zamil Offshore Services Company (“Zamil”), the largest offshore and marine services provider in the Middle East, was awarded a five-year Inspection, Repair, and Maintenance (“IRM”) contract, worth at least US$ 530 million over five years (with a two year extension option) by Saudi Arabian Oil Company (“Saudi Aramco”), the world’s largest oil and gas company. Mermaid’s share of revenue from the IRM contract is expected to be in the range of 60% to 70% over five years.

The contract scope of work calls for full diving services, including air/mixed gas diving, saturation diving, ROV intervention, inspection, and routine offshore field repair and maintenance. Saudi Aramco has contracted for the deployment of four offshore support vessels and one dedicated saturation dive support vessel. Mermaid will relocate M.V. Mermaid Asiana to Saudi Arabia to service the contract. In addition, Mermaid and its Middle East-based subsidiary, Subtech Ltd., will provide up to 110 highly skilled divers, three remotely operated vehicles, and scuba replacement packages.

Additionally in October, Mermaid’s 33.75% owned affiliate, Asia Offshore Drilling Ltd (“AOD”), announced its inaugural drilling contract for the first of its three high specification jack-up rigs, AOR-1. The deal is worth US$ 197 million plus a US$ 39.5 million mobilisation fee over three years, with an additional one-year option.

The drilling deployment will be managed by Seadrill Limited ("Seadrill") on behalf of AOD. AOR-1 is currently under construction with Keppel FELS in Singapore and is scheduled arrive in the Middle East to begin operations by June 2013.

Earlier this month, Mermaid's Qatar-based subsidiary Subtech, won a five-year US$ 25 million contract from a leading international upstream oil and gas operator. Carried out by Mermaid’s specialised DP barge, DPB Mermaid Siam, the scope of services will include full service offshore field maintenance, remedial and call-off work.

“In particular, the US$ 530 million and the US$ 25 million deals come as a result of the hard work we have put towards securing longer term contracts and expanding our subsea services business beyond South East Asia. The Middle East is a high growth region, and given its weather conditions, diving teams can work year-round, as compared to South East Asia, which has a low season.” commented M.L. Chandchutha Chandratat, TTA’s President & CEO. “For AOD, we are thrilled to see the company grow from concept to fruition in two short years and are very pleased to see AOR-1 employed at strong day rates in the Middle East by a leading oil and gas major.”

“For Mermaid and AOD, these three deals combined enable a stream of stable revenues, profits, and cash flows over the medium term,” said Mr. Chalermchai Mahagitsiri, Mermaid’s acting CEO. “The oil and gas services sector continues to heat up throughout Asia and the Middle East, and Mermaid has made outstanding strides and is well positioned to capture an expanding share of this exciting growth market. Going forward, we’ll look for continued growth from Mermaid’s subsea services segment while also exploring opportunities to expand our drilling segment where globally, modern tender rigs are reporting utilisation rates of up to 95% amidst a supply shortage that will likely keep this rate steady for at least the medium term.

“In particular, Mermaid’s investment in AOD was perfectly timed, and we are now preparing to reap the rewards, with our new-build assets arriving at a time when demand for modern, high specification jack-up rigs is high and supply limited,” continued Mr. Mahagitsiri. “As a result, day rates for new jack-up rigs have climbed and reached a new high of US$ 180,000/day with this contract, and with continued strong outlook for oil and gas exploration, we see this trend holding for at least the next few years.”

Mr. Paul Whiley, Subtech’s Managing Director added, “Subtech has consistently managed on-going and hugely successful expansion programmes through the Middle East and West Africa over the past few years. We are continuing to harness our current momentum as a base from which to expand our business development efforts within our core abilities in the oil rich regions of North Africa and down into the Bight of Biafra.”

Following a period of realignment in 2011, Mermaid’s turnaround culminated in a 20.5% and 194.2% third quarter (that ended on 30 June 2012) year-on-year growth of revenues and profits, respectively. With the business outlook remaining strong for the oil and gas industry, Mermaid is well positioned to continue its bullish momentum with a profitable fiscal year 2012, and with significant increases in revenues and profits from 2013 onwards.

 

About TTA
Thoresen Thai Agencies Public Company Limited (TTA) is a strategic investment holding company listed on the Stock Exchange of Thailand (TTA:TB). Its investment strategy is to grow through a balanced and diversified business portfolio of transport, energy, and infrastructure assets, both domestically and internationally. TTA’s evolution from a dry bulk shipping operator began in 1995 with an investment in Mermaid Maritime Public Company Limited, which has since been listed on the Singapore Stock Exchange (MMT:SP). Since then, TTA has acquired interests in fertiliser and logistics (Baconco Co., Ltd.) coal-related businesses (Merton Group (Cyprus) Limited, Qing Mei Pte.Ltd., and Unique Mining Services Public Company Limited), petroleum tankers (Petrolift, Inc) and a port in Southern Vietnam (Baria Joint Stock Company of Service for Import Export of Agro Forestry Products and Fertilizers). For more information, please visit www.thoresen.com

About Mermaid
Mermaid Maritime Public Company Limited (“Mermaid”) is a leading provider of subsea and drilling services for the offshore oil and gas industry. Founded by Danish mariners in 1983, the group has since developed a strong blue chip client base that includes some of the world's largest oil and gas-related companies, and is recognised for its client-supportive approach and high quality services delivered safely and efficiently. Its subsea division is represented by Mermaid Offshore Services, Subtech, and Seascape Surveys, which operates as a unified structured unit across markets offering clients a comprehensive range of subsea solutions through a highly competent technical and operations workforce operating out of Thailand, Qatar, and Indonesia. The subsea group owns and operates eight (8) subsea vessels, three (3) of which are specialised dive support vessels (DSVs), four (4) saturation diving systems and twelve (12) remotely operated vehicle (ROV) systems, all of which can be deployed to any region. The subsea group serves clients across South East Asia, India, China, the Mediterranean, and the Middle East. Mermaid's drilling division comprises Mermaid Drilling, which provides tender-assist drilling and accommodation barge services through its ownership of two (2) tender rigs, and its investment with Seadrill Ltd. in AOD, which has three (3) high specification premium jack-up drilling rigs under construction in Singapore with deliveries scheduled for 2013. Mermaid's corporate headquarters is located in Bangkok, Thailand and is listed on the Singapore Stock Exchange (MMT:SP). For more information, please visit www.mermaid-maritime.com

About Asia Offshore Drilling Ltd
Asia Offshore Drilling Ltd (“AOD”) was established by Mermaid in 2010, with the aim of owning and operating a fleet of modern high specification jack-up rigs. As of today, the Company has three wholly owned subsidiaries, Asia Offshore Rig 1 Limited (“AOR1”), Asia Offshore Rig 2 Limited (“AOR2”), and Asia Offshore Rig 3 Limited (“AOR3”). AOD is listed in Norway on the Oslo Stock Exchange and expects delivery of its high specification jack-up rigs in March, June, and September 2013. For more information, please visit www.aodrilling.com

About Zamil Offshore Services Company:
Founded by Al-Zamil brothers in 1977, Zamil Offshore Services Company is an owner-operator of more than 60 offshore services support vessels, which is the largest fleet in the Middle East, and the eighth largest globally. Its operations include offshore shipbuilding, vessel and rig repair, and offshore marine services, and seaport operations. Most of Zamil’s vessels are on long-term charter contracts to Saudi Aramco (7 years). The first cooperation between Subtech and Zamil took place in 2002, and the relationship has remained strong since.

About Saudi Arabian Oil Company
Saudi Aramco is the state-owned oil company of the Kingdom of Saudi Arabia, headquartered in Dhahran. Saudi Aramco is the world’s largest oil company by production volume and reserves, managing crude oil and condensate reserves of 259.7 billion barrels. Aramco is a fully integrated petroleum company with exploration, production, refining, petrochemicals, marketing, and international shipping. Aramco’s average daily crude production in 2011 was 9.1 million barrels per day, while its operations span 1.5 million kilometres throughout Saudi Arabia, including the territorial waters of the Arabian Gulf and Red Sea.