4 Dec 2012 07:00
For Immediate Release 4 December 2012
Creon Resources Plc
("Creon" or "the Company")
Portfolio Update: $170m drilling rig order secured
The directors of Creon (AIM: CRO), the resources infrastructure investment company, are delighted to announce that Jiangsu Yangzijiang Offshore Engineering Co. Ltd. ("YZJOE") has entered into a contract valued at US$170 million with Explorer I Limited to construct and deliver one unit of a Le Tourneau Super 116E Class design self-elevating Mobile Offshore Jack up Drilling Rig. Creon's 46.45% owned joint venture with China's third largest ship building group, Yangzijiang Shipbuilding (Holdings) Pte Ltd (SP:YZJ), has a 40% holding in YZJOE. Explorer 1 Limited is 100% owned by Mena Offshore Investments Limited ("MENA") and managed by Offshore Logistics (Asia Pacific) Pte Ltd ("OLAP").
Delivery of the Rig is anticipated in the second quarter of 2015. It will be built to ABS Classifications and capable of drilling to 30,000 feet in sea depths of up to 350 feet. The rig will be fully equipped with state of the art drilling equipment and will have accommodation for 120 people.
Construction of the offshore mobile drilling rig will take place at the existing yard of Creon's joint venture partner, Yangzijiang Shipbuilding, in Jiangsu Province, China.
None of the directors or substantial shareholders of the Company have an interest, direct or indirect, in the contract.
Glen Lau, CEO of Creon, said:
"This agreement bears testimony to the strength of our joint venture partner - Yangzijiang Shipbuilding - our ability to source significant contracts, and the demand in the market for modern mobile drilling vessels to replace older and shallow water drilling rigs that are being phased out of the industry.
"Creon will be able to leverage off our partner's existing world class state of the art yard and infrastructure whilst simultaneously allowing our joint venture business, YZJ Offshore, to develop a new facility at the recently acquired shore line land in Taicang outside Shanghai.
"We are confident that we will be able to build a significant order book through YZJ Offshore and Jiangsu Yangzijiang Offshore Engineering Co. Ltd."
Mena Offshore Investments Limited's CEO, Mr Dino Pereira, commented:
"We were impressed by the professionalism of the management of Yangzijiang Group, its state-of-the-art yard and facilities. We believe that Yangzijiang is one of the finest shipbuilders in the world and should be able to migrate and leverage its experience and expertise to the jack up rig construction business through YZJ Offshore. We are likewise impressed by the highly qualified and experienced management personnel that have been assembled to run the offshore division. We look forward to forging a close working relationship with the team."
For further information please contact:
Creon Resources plc | |||
| Tel: +65 6224 6766 Tel: + 44 (0) 20 7583 8304 | ||
Nominated Adviser & Broker Daniel Stewart | |||
Paul Shackleton/James Felix | Tel: + 44 (0) 20 7776 6550 | ||
GTH Communications Limited | |||
Toby Hall/Suzanne Johnson-Walsh | Tel: + 44 (0) 20 3103 3900 |
About Creon Resources plc
Creon Resources Plc is an investment company whose policy is to invest principally but not exclusively in the resources and/or resources infrastructure sectors.
In July 2012, the Company entered into a joint venture with the multi-billion dollar, Singapore listed, China based shipbuilding company, Yangzijiang Shipbuilding (Holdings) Pte Ltd ("YZJ Holdings"), to invest into the joint venture company, YZJ Offshore Engineering Pte Ltd ("YZJ Offshore"), a Singapore registered company set up by YZJ Holdings to be a leading player in the design and construction of marine offshore oil and gas vessels (jack-up and semi-submersible rigs). YZJ Offshore has a 40% holding in the Chinese mainland business, Jiangsu Yangzijiang Offshore Engineering Co. Ltd ("YZJOE").
To date, Creon has invested US$15.33 million into the joint venture, with YZJ Holdings and its associates having invested a further US$14.67 million. The majority of the funds have gone towards securing land rights to approximately 1.6 million square metres of prime shorefront land in Taicang, some 50 miles north of Shanghai on China's east coast.
YZJ Offshore and YZJOE provide marketing, procurement, front end engineering and design, and management consultancy services for the construction, fabrication and repair of oil and gas marine vessels and platforms.
The Directors believe that the offshore marine rig vessel market is a highly attractive one, underpinned by sustained high global demand and a high oil price environment, the age and phasing out of existing rigs in the market, and the increasing requirement for "floater" structures that are able to operate/drill in deeper water conditions.
ABOUT OFFSHORE LOGISTICS (ASIA PACIFIC) PTE. LTD.
Offshore Logistics Asia Pacific ("OLAP") was incorporated in Singapore in 1997. It is one of the biggest surface to sub-sea oil and gas equipment supplier to the Asian market and is owned and managed by its CEO, Mr. Dino Pereira.
OLAP is an industry leader in the supply of equipment for the oil and gas offshore marine industry. It maintains a wide range of surface and subsea equipment that can be effectively deployed on-site professionally within a short time. The company also provides repairs and maintenance as well as storage services and is the regional representative and sole agent for some renowned products and services in the oil and gas sector.
OLAP is strategically located within the Loyang Industrial Park in Singapore with convenient access to the Loyang Offshore Supply Base that serves as the premier marine hub in Singapore and caters primarily to the oil and gas offshore marine industry.
ABOUT MENA OFFSHORE INVESTMENTS LIMITED
Mena Offshore Investments Limited is a fund managed by OLAP, and domiciled in Labuan, Malaysia, primarily to own assets in the oil and gas market.