HAMILTON, Bermuda, July 29, 2022 /PRNewswire/ — Paratus Energy Services Ltd. («Paratus» or the «Company») today announced a trading update for the first quarter 2022 and updates on Paratus, its subsidiaries, and associated companies («Paratus Group»).
1.1 Paratus
In the first quarter ending March 31, 2022, Paratus generated $54 million in revenue and $29 million in EBITDA[1]. As a result of the pre-packaged Chapter 11 restructuring on January 20, 2022, comparisons of revenue and EBITDA to the preceding quarter are not meaningful.
1.2 SeaMex Group
During the same period, Paratus’ wholly owned subsidiary SeaMex Holdings, Ltd. («SeaMex») and its subsidiaries («SeaMex Group») generated $54 million in revenue and $30 million in EBITDA. Compared to the preceding quarter, revenue remained unchanged, and EBITDA decreased by 3.2%.[2] For the first quarter ending March 31, 2022, SeaMex Group earned an average contractual rate of $115 thousand per day with $705 million in contract backlog.
1.3 Joint Venture in Seabras Group
Seabras UK Limited, (a wholly owned subsidiary of Paratus) holds a 50% equity interest in its associated company and its subsidiaries («Seabras JV»). In the first quarter ending March 31, 2022, Seabras JV generated $94 million in revenue and $43 million in EBITDA. Compared to the preceding quarter, revenue and EBITDA decreased by 3.1% and 23.2%, respectively. In the first quarter ending March 31, Seabras earned an average contractual rate of $208 thousand per day with $916 million in contract backlog.
2. Other Updates
1. SeaMex Group
Net Proceeds of $187 million from remarketing of PEMEX notes
On June 1, 2022, SeaMex exchanged approximately $196 million of outstanding Codificación de Pagos y Descuentos («COPADES») into $196 million newly issued Petroleos Mexicanos («PEMEX») senior unsecured notes due 2029 («PEMEX Notes») under the financing mechanism as announced by PEMEX in March 2022. SeaMex has subsequently entered into a remarketing process to monetize the PEMEX Notes facilitated and managed by Citigroup. The PEMEX Notes were sold in two transactions during the remarketing process: $154 million PEMEX Notes were sold at 97.6% and the remaining $42 million PEMEX Notes were sold at 87.0%, each exclusive of remarketing fees and accrued interest. In aggregate, SeaMex received approximately $187 million in net proceeds from the remarketing of PEMEX Notes.
On July 28, 2022, Paratus entered into separate, privately negotiated transactions (the «Agreements») with the holders of its outstanding SeaMex Finance Ltd («SeaMex Finance») 12% Senior Secured Notes Due August 2024 (the «Notes») to repurchase $152 million aggregate principal amount of the Notes (the «Repurchased Notes») for an aggregate cash repurchase price of approximately $170 million comprised of principal repayment, accrued interest, and call premium (the «Repurchases»). The Repurchases closed on July 28, 2022. Following the closing of the Repurchases, SeaMex Finance cancelled the Repurchased Notes, leaving approximately $69 million aggregate principal amounts of Notes outstanding. In connection with the repurchases, the Note Purchase Agreement was amended to, among other things, provide for fixed call premiums, which will reduce on a monthly basis, for the period of July 31, 2022 through February 28, 2023 as reflected in Schedule 4. After February 28, 2023, the call premium will stay fixed at 6.00% through February 29, 2024, and thereafter there will be no call premium.
As of June 30, 2022, SeaMex has $104 million accounts receivable outstanding from PEMEX.
Termination Notice of West Titania
SeaMex has received a termination notice from PEMEX regarding the West Titania jack-up, with an effective termination date of March 16, 2023. SeaMex is actively pursuing other opportunities in the market as well as continuing to engage with PEMEX on this matter.
Open Tax Audits
SeaMex Group has open tax audits with the Mexico Tax Authority for financial years 2014, 2016 and 2017, and has been notified by the Mexico Tax Authority of a potential tax liability for fiscal year 2014. With the assistance of its external professional advisors, the SeaMex Group is reviewing and evaluating this matter.
2. Seabras JV
Contract Extension of Sapura Esmeralda
Sapura Esmeralda’s contract with Petróleo Brasileiro S.A («PETROBRAS») has been extended until August 2022. Seabras is in advanced discussions with PETROBRAS to finalize a 2-year extension for Sapura Esmeralda from August 2022.
New Contract Award for Sapura Onix
Sapura Onix has been awarded a new contract by Enauta Energia SA in Brazil, in a consortium with Sapura Energy Brasil. The contract includes the installation of new subsea manifolds, subsea pumps, flexibles, jumpers, and umbilicals for three new wells, disconnecting the existing Early Production System (EPS), and re-routing existing flexibles and umbilicals to the FPSO Atlanta. The EPCI SURF award is for the Atlanta full field development in the Santos Basin, expecting to run from December 2023 to October 2024.
Schedule 1. Key Financial Highlights
Notes:
1. The second fiscal quarter of 2022 is expected to be disclosed before or at the end of September 2022.
2. For purposes of comparing the first fiscal quarter of 2022 against the fourth fiscal quarter of 2021, figures from SeaMex Finance, Ltd. are utilized for the fourth fiscal quarter of 2021.
3. Excludes intercompany debt and any amortization of fees.
4. Net debt is calculated as gross debt less cash and restricted cash.
5. Contract backlog takes into account West Titania’s termination date of March 16, 2023.
6. The figures presented for Paratus do not include financials from Seabras as Seabras is not consolidated in the Paratus financial statements due to Paratus’ 50% equity ownership of Seabras.
Schedule 2. Pro Forma Key Financials Post Early Repurchase of the SeaMex Finance Ltd 12% Senior Secured Notes Due August 2024
Note:
1. Pro forma Q1 2022 key financials show the effects of early repurchase of the SeaMex Finance Ltd 12% Senior Secured Notes Due August 2024 as if it occurred at the end of Q2 2022. The price of the call premium and amount of accrued interest have been adjusted to reflect the appropriate time of the illustrative paydown.
Schedule 3. Fleet Status Report
SeaMex Group
Seabras Group
Note:
1. The expiration date of West Titania reflects PEMEX’s termination notice.
Schedule 4. SeaMex Finance Ltd 12% Senior Secured Notes Due August 2024 Revised Call Premium Schedule
Paratus — Forward-Looking Statements
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