KUALA LUMPUR, Sept 6 -- Bumi Armada Bhd has sold a floating production storage and offloading vessel (FPSO) to Century Energy Services Ltd (CESL) for US$40 million.
The offshore energy facilities and services provider said its wholly-owned subsidiary Armada Oyo Ltd (AOL) had inked an agreement with CESL for the sale of the Armada Perdana FPSO, which would be redeployed by CESL to another field in Nigeria.
In a statement today, Bumi Armada said the vessel's purchase price would be settled through a deposit of US$5.5 million to be paid by CESL to AOL; US$11.6 million to settle amounts owing by the Bumi Armada group to CESL; US$5 million six months after the delivery date or when oil is first produced in the field (first oil date), whichever is earlier; and US$17.9 million within two years of the first oil date,
Of the US$5 million deposit, US$4.5 million has been paid and the remaining US$1 million will be payable before the end of this year.
To secure the unpaid portion of the purchase price, Bumi Armada would hold a mortgage over the Armada Perdana FPSO, the company said.
“The conclusion of the sale of the Armada Perdana FPSO will absolve the group from its demobilisation obligations,” it said.
The group would recognise the unpaid portions of the purchase price as and when funds were received from CESL, Bumi Armada said.
The gain to be recognised in the financial statements for the financial year ending Dec 31, 2019, would be about US$5 million, it added.
The Armada Perdana FPSO has been out of contract in Nigeria since its previous charterer, Erin Petroleum Nigeria Ltd, along with its parent company Erin Energy Corporation, filed for bankruptcy under Chapter 11 of the US Bankruptcy Code in April 2018.
Bumi Armada announced to the stock exchange in June 2017 that the group was suspending the bare-boat charter as well as operations and maintenance contracts on the Armada Perdana FPSO to Erin Petroleum due to payment delays and irregular payments, respectively.