Ship Finance acquires 2 drilling rigs for $1.7B

Oil tanker owner and operator Ship Finance International Ltd. said Tuesday it agreed to acquire two drilling rigs from Seadrill Ltd. for $1.7 billion.

The Bermuda-based company said the purchase of the ultra-deepwater, semi-submersible drilling rigs will be financed with a $1.4 billion loan facility from a syndicate of banks and its own $300 million investment.

The $300 million will come from a combination of available liquidity and new financing arrangements related to existing assets, Ship Finance said.

The company said it expects to acquire the first ship, "West Hercules," in early October, in combination with a 15-year charter back. Seadrill has subchartered the rig to Husky Oil China Ltd. for the first three years at a rate of $524,000 per day.

Ship Finance will acquire the second ship, "West Taurus," immediately following its delivery to Seadrill in December, the company said. That ship will also come with a 15-year charter back, six years of which have been sub-chartered by Seadrill to Brazil's Petroleo Brasileiro SA for $630,000 a day.

The company said it intends to increase its quarterly dividend following the transaction.

Shares of Ship Finance fell 12 cents to $20.51 in morning trading.