Shares jump as Creon agrees deal to build jack-up

Resources infrastructure investment company Creon has cheered investors with the news that it has entered into a contract with Explorer 1 to construct and deliver one unit of a self-elevating mobile offshore jack-up drilling rig.

Under the the $170m deal, Jiangsu Yangzijiang Offshore Engineering Co., in which Creon's 46.45% owned joint venture has a 40% stake, will build a 'Le Tourneau Super 116E Class' design rig capable of drilling to 30,000 feet in sea depths of up to 350 feet. It will be fully equipped with state of the art drilling equipment and accommodation for 120 people.

Construction of the offshore mobile drilling rig will take place at the existing yard of Creon's joint venture partner, Yangzijiang Shipbuilding, in Jiangsu Province, China.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Chief Executive Officer Glen Lau, said: "This agreement bears testimony to the strength of our joint venture partner - Yangzijiang Shipbuilding - our ability to source significant contracts, and the demand in the market for modern mobile drilling vessels to replace older and shallow water drilling rigs that are being phased out of the industry.

"Creon will be able to leverage off our partner's existing world class state of the art yard and infrastructure whilst simultaneously allowing our joint venture business, YZJ Offshore, to develop a new facility at the recently acquired shore line land in Taicang outside Shanghai."

The share price rose 23.08% to 0.80p by 09:10.

NR