PSW Technology has signed a contract to divest well control equipment to an international oil and gas company.
The transaction is expected to be conducted through a cash settlement and is of substantial value, with the sales amount at the higher end of the value range. The substantial contract for Sana ranges between $4.8 million and $14.5 million (NOK 50-150 million).
The delivery of the equipment is expected to take place in the first quarter of 2024, and the profit will be recognized upon delivery of the equipment, the company said.
“With this contract, PSW Technology do not only generate free cash flow but also has the opportunity to further develop similar well control equipment in our possession, hence expanding our market position,” said Richard Cornell, Managing Director in PSW Technology.
“The transaction is a continuation of unlocking cash potential in our balance sheet, as previously demonstrated by the sale of Scana Korea. We are pleased that we can both enhance our liquidity and distribute funds to our shareholders and in addition strengthen our delivery capabilities in well control services,” added Pål Selvik, CEO of Scana.
Assuming the transaction is completed, the board of directors of Scana will convene an extraordinary general meeting proposing the distribution of extraordinary dividends of NOK 0.05 per share. The remaining proceeds from the sale will be considered for repayment of up to $4.8 million (NOK 50 million) of its long-term debt and investments in accretive growth opportunities.