AIDEA sells stake in jack-up rig

  • By ELWOOD BREHMER
  • Saturday, November 15, 2014 7:50pm
  • News

The Alaska Industrial Development and Export Authority sold its stake in Kenai Offshore Ventures for $25.6 million and the Endeavour jack-up rig is on its way out of Cook Inlet, the authority announced Nov. 14.

Ezion Holdings Ltd. and its subsidiary Teras Investments approached AIDEA to purchase its share of Kenai Offshore Ventures after the joint-venture company was unable to secure long-term work for the Endeavour in the Inlet.

“The Endeavour helped spur a renaissance of exploration in Cook Inlet, and was key in the discovery of a major oil and gas find in the Cosmopolitan unit. The rig’s presence in Alaska promoted significant job creation and economic activity in Cook Inlet,” AIDEA Executive Director Ted Leonard said in a release.

The sale price includes the original investment and a remaining dividend due to the authority, according to spokesman Karsten Rodvik.

With just more than $4 million of dividends in 2013 and 2014, AIDEA will clear about $5 million when the sale closes on Jan. 31, 2015, Rodvik wrote in an email.

AIDEA bought into Kenai Offshore Ventures as a preferred investor for $23.6 million in 2011.

The state development authority is a self-supporting enterprise that pays an annual dividend to the State of Alaska.

The Endeavour will head to South Africa on a heavy lift vessel pending final AIDEA approval, the release states.

AIDEA Director of Asset Management Jim Hemsath said the partnership in the Endeavour helped spur another joint financing of a North Slope oil and gas processing facility at the developing Mustang Field, along with being a part of the recent Cook Inlet rejuvenation.

He also noted that AIDEA is in discussions about the potential of new oil and gas facilities and bringing a new drill rig to the Inlet.

“We remain bullish on Cook Inlet,” Hemsath said.

Originally, now-bankrupt Buccaneer Energy Ltd. partnered with AIDEA and Ezion to bring the jack-up rig to Alaska. Buccaneer sold its 50 percent share in Kenai Offshore Ventures to Ezion for $23.9 million in January. At the time Buccaneer said the proceeds form the sale would be used to finance capital expenses and repay debt.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.

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