* No dividend in 2012 or 2013
* Net loss of $100 mln seen in 2012
* Shares surge 17 pct
* Total provisions for Yme rise to $1.1 bln
By Anthony Deutsch and Gilbert Kreijger
AMSTERDAM, Dec 20 SBM Offshore, the
Dutch maritime services group, will take charges totalling $629
million, mostly to write down a troubled Norwegian oil platform
project, and will also issue new shares worth up to 20 percent
of its capital.
SBM Offshore has been struggling since last year with the
Yme platform, developed for oil firms Talisman Energy
and Lotos off the Norwegian coast. A share or rights
issue was expected by analysts.
The Yme project is in limbo, having been evacuated over
safety concerns last summer, and Talisman, the operator, has no
indication when production will ever start. Following numerous
delays, it is more than a year and half behind schedule.
SBM Offshore shares, which have been under pressure, surged
as much as 17 percent as investors were relieved by prospects of
an end to the costly dispute.
SBM Offshore said in a statement on Thursday its management
would propose not paying a dividend in 2012 or 2013, after
missing a payout in 2011.
The latest provisions and additional charges will push its
results to a net loss of around $100 million in 2012, SBM said.
In 2011, it took $407 million in charges on Yme, which has
suffered from multiple technical problems, and a second project
in Nova Scotia.
SBM Offshore will take an additional $400 million charge
this year to fully write down Yme, make a $200 million provision
for expected settlement costs, and take a $29 million charge for
additional costs related to the Deep Panuke gas platform with
Encana Corp. in Canada, it said on Thursday.
The start-up of Deep Panuke, a natural gas development off
the coast of Nova Scotia, was recently pushed back from the end
of this year to a new target of the first half of 2013 due to
problems with the equipment.
The measures take the total provisions over the past two
years for Yme to $1.1 billion and $1.5 billion, when including
"For SBM it means that a file with a lot of uncertainty is
taken a step closer to a final solution," Chief Financial
Officer Peter van Rossum told reporters.
"We aren't there yet, but it is clear which direction it is
going with the platform."
SBM Offshore said the most likely scenario is for the
platform to be dismantled, but the costs and timing of such an
operation, and the breakdown between parties, remain unclear.
"It is likely the project will not be finished and the value
of the project is being reduced to zero. We will write off the
total value of the platform," Van Rossum said.
Talisman, which has taken its own hefty write-downs on the
project, said on Thursday it was a "step in the right
direction," but it was surprised to hear about the development
through a press release and not from SBM Offshore directly.
"We still want to dismantle the platform and move it to land
so it can be properly repaired and adapted for Norwegian
conditions," Talisman spokesman Vidar Nedreboe said.
Early this year, the company removed any contribution from
Yme from its production forecasts, blaming the chronic delays.
However, Talisman said on Thursday it has not ruled out the
chances that Yme will start up and eventually produce oil at the
40,000 barrel per day design rate.
The troubled platform projects led to a management shake-up
at SBM Offshore and have pressured its stock price.
Credit Suisse said in a trading note "this is a major step
forward for SBM, recognising that the Yme job has been extremely
disappointing," but added that uncertainty remains.
"The main outstanding item is the possibility of litigation
from the Yme partners which in our view is now the main downside
risk to the stock," it said.
SBM Offshore, a maker of oil and gas platforms, said it
would also issue new shares worth 9.95 percent of its capital in
a private placement with Dutch investor HAL to raise $193
million to make sure bank covenants are met.
In addition, it plans a 10 percent rights issue if it
reaches a settlement with Talisman over the Yme project, to
strengthen its equity position. The value of that transaction
would be linked to the potential settlement with Talisman.
In July, Yme was evacuated over concerns it could collapse
during the winter months and it has been empty since.