PGS has as part of a tender process offered to sell the Ramform Sterling to the Japan Oil, Gas and Metals National Corporation (JOGMEC) an incorporated administrative agency of Ministry of Economy Trade and Industry.
PGS has now been informed that the Company is the preferred tenderer, and negotiations will be initiated with the aim of concluding necessary contracts. A final award to PGS will only take place if and when all contracts have been concluded. PGS anticipates that this will happen during the first quarter of 2019.
The tender process also includes up to 10-year service agreement with annual renewals. For this part of the tender PGS has formed a joint venture with Nippon Yusen Kabushiki Kaisha (NYK) and Hitachi, Ltd (Hitachi). The joint venture will establish a Special Purpose Company (SPC) which will aim to conclude final contracts with JOGMEC. NYK will be responsible for vessel operation, Hitachi for data processing and PGS will provide technical and operational services, support and training.
The vessel sale excludes the seismic streamer package. SPC will conclude a separate lease contract with PGS on behalf of JOGMEC. Subject to final agreements, JOGMEC is scheduled to take delivery of Ramform Sterling at the start of the second quarter of 2019.
PGS intends to maintain the same operated fleet size in 2019 as the Company currently has. If the Ramform Sterling is sold to JOGMEC, PGS will reintroduce the Ramform Vanguard from the summer of 2019. CAPEX to reintroduce the vessel primarily relates to in sea equipment and is estimated not to exceed USD 25 million. If concluded, the sale of Ramform Sterling is not expected to result in any material gain in the financial statements.