EOC Forms Joint Venture to Execute US$1Bn Chim Sao Project in Vietnam

Friday, Feb 05, 2010

EOC will team up with Ezra Holdings Limited (“Ezra”), PetroVietnam Transportation Corporation (“PVTrans”) and KSI Production Pte Ltd (“KSI”) to execute the high-profile project contracted with Premier Oil Vietnam Offshore B.V.. Under the terms of the Shareholders’ Agreement, EOC, Ezra and KSI (collectively, the “Initial Shareholders”) have agreed to inject an initial amount of US$1 million (the “Initial Equity Amount”) in the share capital of JV Company of which EOC shall subscribe for such number of shares in the capital of the JV Company (“Shares”), at an issue price of US$1 per Share, representing 43.3% of the Initial Equity Amount (being US$433,333), the remainder of which will be held by the other Initial Shareholders.

By 31 December 2010, Ezra, EOC, KSI and PV Trans agree to subscribe for such number of new Shares (such date of subscription, the “Subscription Date”) at an issue price of US$1 per Share in cash, in accordance with the terms and subject to the conditions of the Shareholders’ Agreement so as to increase the aggregate investment amount to US$150 million (the “Ultimate Investment Amount”), of which a total of up to US$65 million shall be contributed by EOC representing 43.3%, subject to a minimum contribution amount of US$40 million or representing 26.67%, of the Ultimate Investment Amount. The final contribution amount will be dependent on the status of regulatory approvals required by certain JV partners.

From the date of the Shareholders’ Agreement and until the Subscription Date, any financing extended to the JV Company (save for the Initial Equity Amount) shall be by way of shareholder loans and on the Subscription Date, all shareholder loans extended to the JV Company by the Initial Shareholders during the aforementioned period will be capitalised into Shares. These shareholder loans shall bear interest at a rate of eight percent (8%) per annum.

The Shareholders’ Agreement is conditional upon certain conditions precedent being fulfilled within 90 days from the date of the Shareholders’ Agreement. (or such other date as may be mutually agreed upon by the Shareholders in writing)

Mr Lim Kwee Keong, EOC’s Chief Executive Officer, said: “EOC’s ability to garner support through this joint venture, even in the midst of the tight credit environment today, is a testament to our partners’ confidence in the Group. Our proven ability to deliver and our growing range of capabilities have positioned us to take advantage of greater opportunities that will allow us to further build on our track record in the region.”

EOC’s co-ownership of the FPSO will significantly advance one of the Group’s long-term strategies of building a robust earnings model through time-charter income. The value of this project – the Group’s largest to-date – approximates US$1 billion for a contract period of up to 12 years with all extension options exercised. Production is expected to begin in the second quarter of 2011.

EOC recently announced its 1Q FY10 earnings, reporting a 62% year-on-year jump in net attributable profit to US$9.9 million, thanks to strong contributions from the Lewek Arunothai. The Group also bettered its financial position, strengthening its balance sheet as cash flow from operations surged to US$14.9 million from US$2.5 million over the same period. Its net gearing was lowered to 2.2 times from 2.3 times, while its interest cover rose to 9.3 times from 6.1 times.

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ABOUT THE COMPANY www.emasoffshore-cnp.com
Oslo BØrs listing: October 2007

EOC Limited offers offshore construction & floating production services and installation & commissioning work as well as transportation services that support the entire life cycle of offshore oil & gas production.

It manages two accommodation crane barges, the Lewek Conqueror and the Lewek Chancellor; a dynamically positioned heavy lift accommodation pipelay vessel, the Lewek Champion; and a floating production, storage and offloading unit, the Lewek Arunothai. These vessels are utilised in various support activities that last through facility development, production, operations, maintenance and abandonment.

The firm operates in Australia, Brunei, India, Indonesia, Malaysia, the Middle East, the Philippines, and Thailand, and is an associate company of Singapore Exchange-listed Ezra Holdings Limited, the largest owner/operator of an integrated range of offshore support vessels for charter across a broad spectrum of the oil & gas offshore support services supply chain.

Other media releases on the company can be accessed at www.oaktreeadvisers.com

Source: Business Wire