Northern Ocean rig gets more work in Norway
Northern Ocean Secures New Contract in Norway
Northern Ocean, a spin-off of Northern Drilling, has recently announced a significant contract win for its semisubmersible rig, the Deepsea Bollsta. This contract, awarded by an undisclosed client, marks a notable achievement for the company as it continues to expand its operations in the competitive drilling market. The contract is set to commence in the second quarter of 2025, right after the rig mobilizes for operations on the Norwegian Continental Shelf. This development not only strengthens Northern Ocean’s position in the industry but also enhances its financial outlook.
Contract Details and Financial Implications
The newly secured contract for the Deepsea Bollsta has an estimated firm duration ranging from 54 to 99 days. This timeframe is crucial as it allows the rig to complete this contract before moving on to a previously won contract with Equinor, which was secured just last month. The financial implications of this contract are significant. It is expected to add between $23 million and $42 million to Northern Ocean’s firm backlog. Depending on the length of the latest deal, the company’s total firm backlog will rise to between $488 million and $507 million.
This increase in backlog is vital for Northern Ocean as it provides a clearer picture of future revenue streams. The company has stated that it does not plan to raise additional equity in connection with the rig’s mobilization to Norway. Instead, Northern Ocean is focusing on refinancing its current debt, which is due in June 2026. The company aims to achieve a favorable balance between the terms and conditions of the refinancing and its order backlog. This strategic approach reflects Northern Ocean’s commitment to maintaining financial stability while pursuing growth opportunities.
Future Prospects and Strategic Focus
With the Deepsea Bollsta now secured on contracts until the end of 2027, excluding options, Northern Ocean is shifting its focus to the Deepsea Mira. The company plans to concentrate its marketing efforts on increasing the order backlog for this rig. This strategic pivot is essential as it allows Northern Ocean to diversify its portfolio and reduce reliance on a single asset.
Arne Jacobsen, CEO of Northern Ocean, expressed optimism about the recent contract wins. He noted that this is the third contract secured in as many months, which underscores the company’s growing reputation in the drilling sector. Jacobsen emphasized that this new contract not only boosts the backlog but also minimizes potential idle time for the Deepsea Bollsta before it transitions to the Equinor contract.
As Northern Ocean continues to navigate the complexities of the drilling market, its proactive approach to securing contracts and managing finances positions it well for future growth. The company remains committed to enhancing its operational capabilities while exploring new opportunities in the Norwegian Continental Shelf and beyond.
