Mexican rig operator in trouble

MEXICO CITY • Integradora de Servicios Petroleros Oro Negro, a Mexican oil-rig operator partly owned by Temasek Holdings, is again amending bond covenants as it struggles to win new contracts.

Noteholders agreed at a Tuesday meeting on changes to the company's US$175 million (S$247 million) of securities that are due in December, for a second time this year.

Oro Negro failed to revalue its newest rig by an Aug 31 deadline as it tries to lease the asset to state-owned Petroleos Mexicanos (Pemex) by year-end, according to a statement.

Oil explorers are cutting back spending after crude prices slid below US$40 a barrel last month.

In response, Pemex has separately cut the daily lease rates on existing rigs it chartered from operators, including Oro Negro and Seadrill in the Gulf of Mexico.

Investors allowed Oro Negro to push back certain obligations to the end of this month, while also giving it until then to comply with a minimum asset coverage ratio of 120 per cent, according to a statement from Nordic Trustee ASA.

The approval came after creditors opposed some company requests last month, including a plan to pay the bond coupon in kind.

Oro Negro's 11 per cent 2015 notes have dropped to 75.38 cents on the dollar after being sold at 97 cents last November, according to Bloomberg-compiled prices.

According to its website, the rig operator had hired advisers in April to find "strategic alternatives" for the business whose investors include Mexican private equity firm Axis Group, Temasek and Unbited States private equity firm Ares Management.


A version of this article appeared in the print edition of The Straits Times on September 03, 2015, with the headline 'Mexican rig operator in trouble'. Print Edition | Subscribe