EMGS Expands into Offshore Construction Sector with Acquisition of Siem Day Vessel

Norwegian seismic service provider Electromagnetic Geoservices (EMGS) has made a strategic move into the offshore construction sector with the recent acquisition of the Siem Day offshore subsea construction vessel (OSCV).

This acquisition marks a significant diversification for EMGS, as it complements the company’s existing electromagnetic operations and allows them to tap into the growing subsea construction market.

The Siem Day vessel, built in 2013 by Vard, was purchased from Siem Offshore’s subsidiary, Siem Day II AS. EMGS has entered into a five-year bareboat charter agreement with Siem, starting at a rate of $42,000 per day until December 31, 2025, with an increase to $45,000 per day thereafter.

As part of the agreement, EMGS has options to purchase the vessel at the third and fourth anniversaries of the charter commencement, as well as an unconditional purchase obligation at the end of the charter period. The total acquisition price of $108.90 million is structured to minimize upfront cash outlay, with an initial payment of $10.89 million due at charter commencement.

Looking ahead, EMGS plans to operate the Siem Day vessel on term contracts after the current charter expires. Spot charter rates for similar vessels are currently estimated to range between $100,000 and $140,000 per day, indicating potential profitability for EMGS in the future.

With a long-term strategy focused on growth in the subsea sector, EMGS aims to acquire high-quality assets under contract to capitalize on the dynamic subsea market beyond 2025. To streamline operations without increasing fixed costs, EMGS will engage the vessel’s current manager, Aurora Offshore, for technical and commercial ship management. Notably, Siem Offshore holds a 40% share in Aurora Offshore.