CLOSER COOPERATION BETWEEN REACH AND MMT WITHIN
SURVEY SERVICES
Reach Subsea and MMT have established a Joint
Venture agreement primarily for survey services.
Consequently, the two parties have performed a
charter restructuring arrangement, which will add
more flexibility to the business model and
strengthen our combined market reach.
Included in the Joint Venture agreement is the
shared commitment of the two survey vessels, Edda
Fonn on charter to Reach until December 2017 and
Stril Explorer on charter to MMT until April 2016.
The two vessels will now be operated in a pool
arrangement where risk and reward will be shared
50/50 between Reach and MMT, and jointly marketed
towards our clients. In case of not renewing the
charter on Stril Explorer beyond the current period,
Reach will consequently have a reduced charter
commitment of approximately NOK 70 million. This
will be re-invested by adding vessel capacity to the
pool with MMT. Thus, the agreement increases our
capacity to grow at a point in time when
opportunities are abundant, and the parties will
leverage this increased joint strength by adding new
competitive vessel capacity in the future and
further develop the services offered to our clients
worldwide.
CEO of Reach Subsea, Jostein Alendal, comments: "The
co-operation between Reach and MMT on development
and operation of the Surveyor Interceptor, our high-
speed survey ROV, has worked out very well. While
Reach derives the majority of its revenues from the
Oil & Gas sector, MMT has the majority of its
revenues from clients in the renewable and telecom
sectors. Thus, the two companies are highly
complementary on the client side, which both parties
stand to mutually benefit from."
CEO of MMT, Stefan Eliasson comments; "The co-
operation will strengthen our strategy to become a
major player within oil and gas and be a step
forward for further marketing our excellent methods
and technology in the market. Together with Reach
we can offer high standard technology and cost
effective services which is aligned with our Clients
expectations."
BUSINESS UPDATE
Reach Subsea has been able to navigate well in the
current challenging market environment, and looks
set to post a Q2 2015 EBITDA well ahead of the
corresponding quarter last year. We have had good
utilisation of our assets and personnel in the spot
market during Q2 which, coupled with our flexible
charter arrangements, has compensated for a tough
pricing environment. Reach will report its Q2 2015
results on 26 August 2015.
For further comments, please contact:
Birgitte W Johansen (CFO): +47 99 45 12 79