Mermaid bags US$162m contract extension for Middle East subsea services

A JOINT-VENTURE company formed between Mermaid Maritime and a local offshore services operator has secured a contract extension with a reputable oil major in a Gulf Cooperation Council country in the Middle East, Mermaid said on Monday.

Mermaid's portion of the total contract value for the three-year extension period is estimated to be around US$162 million. Work will commence in the fourth quarter of 2019.

The contract is for offshore inspection, repair and maintenance services with a national upstream oil and gas company in direct continuation to its initial seven-year contract period, whereby Mermaid will continue to provide a suite of diving services using its modern DP2 saturation dive support vessel "Mermaid Asiana" along with remotely-operated vehicles, specialised diving equipment and divers.

Mermaid's joint-venture partner, a reputable offshore and marine services company, will provide other offshore vessel-related services and logistics. Mermaid has served this contract since 2012.

The contract extension is at lower day rates. Assuming that the contract extension had commenced and had been completed within the most recent financial year (Mermaid's last financial year ended Dec 31, 2018), the contract extension would have had a material adverse effect on the earnings per share of the company on a consolidated basis, Mermaid said.

Mermaid chief executive Chalermchai Mahagitsiri said: "For Mermaid, this contract extension is the result of the excellent service that we provide and represents a stream of stable revenue over the next three financial years. It is also in line with our strategic initiative to maintaining our presence in the region and as a platform for further growth and expansion."

Mermaid Maritime shares fell 0.1 Singapore cent or 1.39 per cent to S$0.071 last Friday.