Paratus Energy Services Ltd. Announces $65.5 million Receipt from Seabras, $65.3 million Receipt by SeaMex from Pemex, Commitment to Growth and Value Creation for Stakeholders

HAMILTON, Bermuda, July 3, 2023 /PRNewswire/ -- Paratus Energy Services Ltd. ("Paratus" or "Company") today announced significant cash receipts, and other business updates on Paratus, its subsidiaries, and associated companies ("Paratus Group")

Updated regarding Seabras

Paratus is pleased to announce the receipt of a $65.5 million payment from Seabras Sapura Holding GmbH and related subsidiaries (collectively "Seabras" or "JV") on account of its 50% shareholder position.

This substantial payment represents the culmination of the diligent efforts undertaken by Seabras and the JV shareholders, and highlights the strength of Seabras' financial performance. As previously announced, Seabras was able to fully retire its Bank Facilities^[1] more than 3 years earlier than scheduled, positioning the JV with a largely deleveraged balance sheet and with an enhanced ability to return capital to its JV shareholders.

Paratus anticipates more receipts from Seabras in the future. Pursuant to an agreed plan amongst the JV shareholders, Seabras will distribute all excess cash to its JV shareholders throughout the remainder of 2023.

Paratus' leadership views this payment as a positive development and a testament to Seabras' strong cash flow generating capabilities and capital returns. The receipt of these funds will further enhance Paratus' financial position, and Paratus' leadership remains focused on evaluating all capital allocation alternatives to maximize value for its stakeholders.

On June 20, 2023, Petróleo Brasileiro S.A. ("Petrobras") launched its tender process for the procurement of pipelaying supply vessels, which includes 34 batches across five lots with commencement dates ranging from 2024 through 2026. Seabras intends to actively participate in the process, and any successful awards will further bolster its backlog and go forward financial position. 

In addition to its financial strengths, Seabras has consistently demonstrated strong operational performance.  In June 2023, the Jade vessel was honored with 1st place for the Barcópolis award, presented by Petrobras, for achieving the highest KPIs in 2022. This prestigious recognition serves as a testament to Seabras' ongoing operational excellence, ability to deliver exceptional services, and upholding the highest industry standards. 

Updates regarding SeaMex

In the first half of 2023, SeaMex Holdings Ltd. ("SeaMex") benefited from $125.8 million of receipts from its key customer, Pemex Exploración y Producción ("Pemex"), which includes a $65.3 million payment received in June 2023. As of June 30, 2023, SeaMex had a net cash position of approximately $75 million, comprised of $45.6 million of debt and $120.9 million of cash^[2]. SeaMex intends to utilize its excess cash to fully deleverage SeaMex, and support the operations and growth of the company.

Paratus Commitment to Growth and Value Creation

Paratus is actively seeking opportunities to acquire the right assets that offer strong returns, enhance its market position and financial profile, and contribute to long-term sustainable growth. Paratus believes that growth can be achieved by strategically expanding its portfolio with assets that complement its existing operations, or through strategic consolidations.

Paratus recently pursued a potential growth opportunity by participating in a bid for certain jack-up assets. While the bid did not ultimately materialize, the Company remains resolute in its commitment to pursuing growth opportunities that deliver long-term value for its stakeholders.

"Our capital discipline and focus on value creation guided our decision-making process, and we will continue to evaluate potential opportunities with prudence," said Robert Jensen, Executive Director of Paratus.

As Paratus pursues growth opportunities, the Company remains dedicated to maintaining its financial strength and creating value for its stakeholders, while also ensuring the long-term success and stability of the organization.

Forward-Looking Statements

This release includes forward-looking statements. Such statements are generally not historical in nature, and specifically include statements about the Transaction. These statements are based on management's current plans, expectations, assumptions and beliefs concerning future events impacting the Company and its subsidiaries and therefore involve a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, which speak only as of the date of this news release. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the timing for and ultimate completion of the Transaction, management's reliance on third party professional advisors and operational partners and providers, the Company's ability (or inability) to control the operations and governance of certain joint ventures and investment vehicles, oil and energy services and solutions market conditions, subsea services market conditions, and offshore drilling market conditions, the cost and timing of capital projects, the performance of operating assets, delay in payment or disputes with customers, the ability to successfully employ operating assets, procure or have access to financing, ability to comply with loan covenants, liquidity and adequacy of cash flow from operations of its subsidiaries and investments, fluctuations in the international price of oil or alternative energy sources, international financial, commodity or currency market conditions, including, in each case, the impact of COVID-19 and related economic conditions, changes in governmental regulations, including in connection with COVID-19, increased competition in any of the industries in which the Company or any of its subsidiaries operates, the impact of global economic conditions and global health threats, including in connection with COVID-19, the Company's ability to maintain relationships with suppliers, customers, joint venture partners, professional advisors, operational partners and providers, employees and other third parties and the Company's ability to maintain adequate financing to support the Company's business plans, factors related to the offshore drilling, subsea services, and oil and energy services and solutions markets, the impact of global economic conditions, the Company's liquidity and the adequacy of cash flows to meet obligations, including the ability of the Company's subsidiaries and investment vehicles to pay dividends, political and other uncertainties, the concentration of the Company's revenues in certain geographical jurisdictions, limitations on insurance coverage, the Company's ability (or inability) to attract and retain skilled personnel on commercially reasonable terms, the level of expected capital expenditures, the Company's expected financing of such capital expenditures, and the timing and cost of completion of capital projects, fluctuations in interest rates or exchange rates and currency devaluations relating to foreign or U.S. monetary policy, tax matters, changes in tax laws, treaties and regulations, tax assessments and liabilities for tax issues, legal and regulatory matters, customs and environmental matters, the potential impacts on the Company's business resulting from climate-change or greenhouse gas legislation or regulations, the impact on the Company's business from climate-change related physical changes or changes in weather patterns, and the occurrence of cybersecurity incidents, attacks or other breaches to the Company's information technology systems, including its rig operating systems. Consequently, no forward-looking statement can be guaranteed.

Neither the Company nor any of its subsidiaries undertakes any obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for the Company to predict all of these factors. Further, the Company cannot assess the impact of each such factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.

^[1] Bank Facilities refer to two loan agreements – one relating to Diamante and Topazio (totaling approximately $537 million at issuance) and another relating to Onix, Jade and Rubi (totaling approximately $769 million at issuance). Following the Bank Facilities repayment, the only outstanding third-party debt obligation is the Esmeralda vessel financing from the Brazilian Merchant Marine Fund, which has a maturity of 2032 and is collateralized by the Esmeralda vessel ("Esmeralda Facility"). The company intends to keep the Esmeralda Facility in place as it represents a highly attractive long-term source of funding, backed by the Brazilian Ministry of Transportation.

^[2] Includes restricted and unrestricted cash

CONTACT:
paratus@hawthornadvisors.com