By SHIRLEY MAULUDU
THE High Arctic Energy Services Inc and Oil Search are in a US$100 million (K310.5 million) joint venture negotiation, High Arctic chairman Michael Binnion says.
Binnion told The National yesterday that name of the new joint venture will be disclosed once negotiations were completed.
Globe News Wire reported that High Arctic has entered into formal and exclusive negotiations to exchange an equal share of its owned rigs (rigs 102, 115 and 116) for an equal share of the rigs that it has historically managed for its key customer (Oil Search) under long-term management agreements (rigs 103, and 104) in a company to be jointly-owned by High Arctic and its customer.
High Arctic will provide the management of this joint company.
As part of the proposed arrangements, High Arctic will operate the rigs under a minimum three-year exclusive call rig services agreement.
The proposed joint company will focus exclusively on rig ownership and High Arctic will focus on operational efficiencies and optimal rig performance.
“The company that we refer to is Oil Search who is our main customer,” Binnion said.
“(The rigs are) primarily (in) the Highlands. But our rigs are fully heliportable and modern rigs.
“They can drill virtually anywhere a helicopter can go.
“The new name will not be made public until negotiations are complete.
“The new venture represents over US$100 million (K318 million) of investment.
“It is a combination of existing investment by the two parties.”
Mike Maguire, president international as reported by Globe News Wire said: “This joint company is an innovative solution to meeting our key customer’s chief driver of reducing well costs and providing cost efficient drilling solution in PNG.
The Papua New Guinea market is an extraordinary long-term energy sector opportunity.
High Arctic has become the local domain expert delivering top tier drilling services in a challenging logistics region.
We are excited to complete negotiations on this complex transaction, as early as year-end to cement our position as a long-term player in this market.”
High Arctic is a publicly traded company listed on the Toronto Stock Exchange.
The corporation’s principal focus is to provide drilling and specialised well completion services, equipment rentals and other services to the oil and gas industry.
High Arctic’s largest operation is in Papua New Guinea where it provides drilling and specialised well completion services and supplies rig matting, camps and drilling support equipment on a rental basis.
By SHIRLEY MAULUDU