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Paragon Offshore Sale Approval Sought

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Paragon Offshore filed with the U.S. Bankruptcy Court a motion for authorization to sell its L782 Rig and L783 Rig free and clear of all liens, claims, encumbrances and other interests to Dixstone Holdings.

The motion explains, “The Debtors estimate that the Sale will save the Debtors’ estates approximately $4 million in the aggregate in mobilization costs. These costs do not include additional savings attributable to shore base costs, which could be substantially reduced by selling the Rigs….The Buyer is also seeking to purchase the Paragon B153 Rig (the ‘B153’) owned by non-Debtor Paragon Drilling Nigeria. The Debtors estimate that the sale of the B153 will provide approximately $2 million in mobilization cost savings, as well as additional savings attributable to shore base costs. Sale of the B153 to the Buyer is contingent on the Sale of the Rigs.”

In addition, “Thus, by consummating a sale of the Rigs before June 30, 2017, the Debtors will be able to save the costs associated with stacking the Rigs for an additional two months, realize additional, unplanned revenue from the sale of the Rigs to the Buyer rather than to a scrapping facility, and realize additional cost savings associated with the sale of the B153.In accordance with the Agreements, the Buyer has agreed to purchase the L782 for $1.4 million (the ‘L782 Price’) and the L783 for $1.3 million (the ‘L783 Price,’ and together with the L782 Price, the ‘Purchase Price’) free and clear of all liens, claims.”

The Court scheduled an April 28, 2017 hearing on the sale motion, with objections due by April 21, 2017.

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