Dolphin to Enter Marine Seismic Industry
According to Dolphin's Board, the offshore market looks very promising, with anticipated strong growth in demand for seismic services. Accordingly, the Company has decided to establish a division within Dolphin that will focus on offering marine seismic services to the global oil and gas industry. Dolphin will establish a full range of marine geophysical services, including contract seismic, multi client, and processing partnerships. The Company has attracted a tier-one management team with extensive industry to head and grow the new business division. Through their in-depth knowledge of the seismic market, this team has access to a high end fleet of seismic vessels, a multi-client group of people and has obtained debt financing at very attractive terms.
Chairman of the Board of Dolphin, Atle Jacobsen, stated that: "The outlook in the offshore market looks promising and we expect strong growth in demand for seismic services. The agreement with GC Rieber Shipping will secure a high grade of vessel flexibility and low operational risk. The high-capacity vessels will not add to the already known industry streamer count. Seismic industry is a people's business and I very pleased that we have attracted a tier-one group of people with extensive experience from the seismic industry."
Dolphin has on 27th November signed a letter of intent with GC Rieber Shipping's ("RISH") to time charter the 2D seismic vessel Polar Explorer for a fixed period of 12 months, with extension options for up to four years. The vessel will be delivered to Dolphin fully equipped in January 2011.
Simultaneously Dolphin signed a letter of intent with RISH's 65% owned subsidiary Armada Seismic ("Armada") to time charter the newbuild 3D seismic vessel Polar Duke (NB 532, image) for a fixed period of five years, with an extension option for six additional years. The vessel will be upgraded to 14 streamers prior to expected delivery to Dolphin in March 2011.
Polar Duke was built initally for Arrow Seismic, which company was taken over by PGS. Arrow terminated the building contracts for both vessels NB532 and NB533 and the designer GC Rieber continued the contracts in June 2010.
Dolphin has also signed a letter of intent with RISH's 65% owned subsidiary Armada for an option to time charter the newbuild 3D seismic vessel NB 533 (TBN) for a fixed period of three years, with extension options for up to eight years. Dolphin must declare the option for the initial period before 1st November 2011. The vessel is currently under construction at Factorias Vulcano in Vigo (Spain). As the yard's financial situation now is resolved, building of NB 533 will continue, and the vessel is expected to commence operation in Q1 2012.
Dolphin has collected valid offers from all in-sea equipment suppliers that allow an efficient and timely mobilisation of the in-sea packages and related equipment for Polar Duke at a total cost of USD50 million.
Furthermore, Dolphin has signed a letter of intent with Armada to fund the above mentioned streamer packages.
Dolphin is to control a fleet of high capacity seismic vessels (14 streamers at 100m separation), with well- proven design and significant cost benefits compared to other seismic vessels. These vessels offer high capacity and power on small, fast platforms, and are designed to move rapidly between jobs, cutting non-productive steaming time by several days. The Polar Duke and NB 533 vessels are estimated to be in the high end of the "relative cash cost efficiency per streamer per day" scale and hence among the most cost efficient vessels in the industry.
The charter agreements with a well-reputed shipping company, secure a high grade of vessel flexibility and low operational risk. In addition, the delivery schedule enables Dolphin to gradually build a strong position, as NB 533 will enter the market in an anticipated strong recovery in 2012.
The Board underlines that the current IT business will be continued and that it sees future potential in the current business. Furthermore the Board sees interesting synergies with the two business areas as the marine seismic industry needs considerable data processing resources to acquire and process seismic data, and Dolphin will exploit if the current data interconnect solutions can improve the performance in the seismic applications.
