Paragon closes sale-leaseback and extends jackup delivery

Paragon Offshore announced that certain wholly-owned subsidiaries of the company, which were part of the company's acquisition of Prospector Offshore Drilling have closed the combined US$300 million sale-leaseback financing facility that was announced on 4 June 2015.  Net of fees and expenses, Prospector received net proceeds of approximately $292 million.

Image: Paragon Offshore

The company also disclosed that a wholly-owned subsidiary has signed an agreement with Shanghai Waigaoqiao Shipbuilding Co. to extend the delivery date of the high specification Friede and Goldman JU-2000E jackup Prospector 6 to 15 April 2016.  Under the terms of the agreement, no payments are due to the shipyard until the delivery date and upon completion of the delivery protocol.

"The successful completion of these two milestones is a fulfillment of the plans we laid out earlier this year," said Randall D. Stilley, president and CEO of Paragon. "The financing proceeds have substantially increased the company's liquidity.  We are continuing to evaluate potential options for using the proceeds to strengthen our balance sheet and enhance shareholder value.  In the meantime, our business continues to generate cash flow through our safe, reliable, and efficient operations and we are actively reducing our operating expenses both in the office and the field.  Moreover, our recent announcement of the addition of a combined total of six years of backlog on three of our jackup units illustrates the ongoing desirability of our standard specification assets while many newbuild rigs continue to sit idle."

Paragon's operated fleet includes 34 jackups, including two high specification heavy duty/harsh environment jackups, and six floaters (four drillships and two semisubmersibles). Paragon's primary business is contracting its rigs, related equipment and work crews to conduct oil and gas drilling and workover operations for its exploration and production customers on a dayrate basis around the world. Paragon's principal executive offices are located in Houston, Texas.