OREANDA-NEWS. Nam Cheong Limited a leading global offshore marine player listed on the Main Board of the Singapore Exchange Securities Trading Limited (the "SGX") and Malaysia's largest Offshore Support Vessel ("OSV") builder, today announced that it has sold two vessels worth approximately USD 45 million (approximately SUSD 59.5 million).

An Anchor Handling Towing Supply Vessel ("AHTS") was sold to a Netherlands-based repeat customer, Vroon B.V., an international shipping company with experience that has spanned more than a century. Nam Cheong also sold a Platform Supply Vessel ("PSV") to a repeat customer, E.A. Temile Development Company of Nigeria Limited ("Temile") based in West Africa, an established engineering and construction company.

Mr Leong Seng Keat Nam Cheong's Chief Executive Officer said:

"Despite the recent volatility in global oil prices which has affected investor sentiments across the industry, the securing of these orders from our repeat customers evidently reveals the continued interest in oil and gas activities, our strong reputation in the market for quality and reliable vessels as well as our customers' confidence in Nam Cheong's capabilities."

"We are glad that Nam Cheong has evolved from a regional player into an established global leader in the offshore and marine sector. We have consistently received good responses from customers around the world including Europe and West Africa. This has helped broadened our customer base which lowers our geographical concentration risks, placing us in good stead to weather the fluctuations in oil prices. With the securing of the two orders, our order book remains at a healthy level of RM1.7 billion, comprising a total of 26 vessels."

Nam Cheong last sold an AHTS to Vroon B.V. in September 2014. A PSV which has similar specifications to the new PSV order, was also sold to Temile in March 2014, marking the third such PSV unit sold to the customer.

Shallow water projects require oil prices to be at USD 25 - USD 50 per barrel in order to be profitable while deepwater and ultra-deepwater projects are likely to need prices to be as high as USD 70 a barrel in order to breakeven.

Commenting on the outlook, Mr Leong said: "Despite the tougher external environment, particularly for our deepwater counterparts, the shallow water segment remains highly resilient even to recently announced capital expenditure cuts by national oil companies. There is a reasonable margin of safety before oil prices fall to unprofitable levels of below USD 25 to USD 50 per barrel to adversely affect our shallow water segment customers. One of Nam Cheong's unique value propositions is in being a partner to our customers by striving to construct cost efficient vessels that benefit customers by reducing their operating costs."

"We will continue to vigilantly monitor the continuing developments in the industry. Given our leading position in the market as a trusted OSV builder backed by our strong balance sheet, this provides a buffer against further impact and allows us to capitalise on attractive opportunities that may arise amid uncertainties. With the sustained interest in the shallow water vessels across the globe, these factors will likely mitigate Nam Cheong's overall operational risks."

The two vessels are all of American Bureau of Shipping (ABS) class and are being constructed as part of Nam Cheong's built-to-stock series in the Group's subcontracted yards in China. These vessels are scheduled for delivery in 2015 and are expected to contribute positively to the Group's earnings for the financial year ending December 31, 2014 and December 31, 2015.