It was a busy day for Luxembourg-based subsea services vessel owner Subsea 7. With the market outlook improving, Subsea 7 announced a share buy-back programme and proposed a special dividend for shareholders as it released its financial results for Q4 and FY2018. It also signed a long-term contract with BP Exploration to provide subsea construction, inspection, repair and maintenance services covering BP’s North Sea region portfolio of assets west of Shetland and northern North Sea.
“Subsea 7 delivered good operational and financial results in 2018, despite the challenge of delivering projects awarded at lower prices during the downturn,” said Subsea 7 chief executive Jean Cahuzac. “The number of deepwater oil and gas projects awarded by our clients started to increase as industry-wide cost reductions and higher oil and gas prices supported better economic returns.”
The contract with BP was announced on the same day as the release of Subsea 7’s results, in which the company generated US$0.12 per share for Q4 2018 and US$0.56 per share for FY2018, compared to US$0.17 in Q4 2017 and US$0.39 per share for FY2017.
The Subsea 7 board of directors also announced a share repurchase programme of up to US$200M because of a “strong financial and liquidity position and improving market outlook as well as a rebalancing of cash returns.” Subsea 7 said the share repurchases are to be carried out within two years and the repurchased shares will be held in treasury and will be cancelled or used to fulfil obligations under company’s employee share-based payment schemes.
The board also recommended a special dividend of Nkr1.50 (US$0.17) per share would be submitted for shareholder approval at the annual general meeting 17 April.
Long-term contract with BP
As for the terms of the five-year agreement with BP, i-Tech Services, a Subsea 7 company, will provide a life-of-field support vessel complete with work-class and observation-class ROVs, capable of performing inspection, survey, intervention, light subsea construction and emergency response services.
Subsea 7, with a fleet of some 40 vessels, offers life-of-field services that include integrity management systems, seabed mapping, pipeline inspection survey, project management, inspection services, diving, IMR and integrity services for structures and monitoring, inspection, maintenance, repair and replacement of risers.
Offshore activities began in January 2019 using Subsea 7’s high-specification life-of-field vessel Normand Subsea. Project management and engineering support will be executed from i-Tech Services' office in Aberdeen, UK.
“We have over 20 years’ experience working with BP both in the North Sea and in particular the challenging environmental conditions offshore west of Shetland,” said i-Tech Services’ senior vice president Steve Wisely. “This award, which is a renewal of our existing contract, acknowledges the strength and depth of our life-of-field capabilities, technology expertise and proven track record in the successful delivery of safe, efficient and reliable operations.”
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