Dolphin Geophysical liquidation begins

Singapore

The liquidation of Singapore-based Dolphin Geophysical Pte Ltd has commenced and the preliminary signs are the proceeds may fall far short of the outstanding liabilities of the Singapore business unit of the now bankrupt Norwegian seismic player, Dolphin Group ASA.

The process in Singapore officially kicked off after the appointment of the liquidators from Moore Stephens, Mick Aw and Neo Keng Jin, was confirmed at a Feb 24 creditors' meeting.

This came just over two months after the Norway-based parent, Dolphin Group, filed for bankruptcy. The Moore Stephens liquidators have through an advertised notice on Friday's edition of The Business Times, called on the creditors of Dolphin Geophysical to step forward with their claims on or before Apr 4, 2016.

BT understands Dolphin Geophysical has limited assets being disposed of, including some IT (information technology) and computer equipment and office furniture.

The preliminary expectation is that the Singapore outfit will run into a deficiency in excess of S$200 million after deducting realisable assets against liabilities.

The largest creditor of Dolphin Geophysical, said to be a Norwegian bank, has filed a claim for secured and unsecured debts in excess of US$140 million against Dolphin Geophysical.

The unidentified Norwegian bank is believed to be DNB, which has also been named as the biggest bank lender to Dolphin Group ASA.

Besides over US$140 million of bank loans, the outstanding liabilities of Dolphin Geophysical are also said to comprise trade payables and outstanding employer central provident fund contributions tied to the January 2016 salaries already paid out to the now-retrenched staff.

The employer CPF contributions were held back after the liquidation process commenced, although the January salaries for the 160 to 170 employees let go on the winding up of the Singapore business unit, were already paid, an informed source said.

Dolphin Geophysical is understood to be mainly running the asset-light data processing operation in support of its Norwegian parent's core seismic acquisition and interpretation services for the upstream oil and gas sector.

Dolphin Group ASA filed for bankruptcy in Oslo on Dec 14, 2015 after failing to reach an agreement with its bondholders, bankers and other stakeholders on the restructuring of its debt and equity. Dolphin Group ASA has reportedly accumulated about US$500 million in debt.

In a joint statement on the bankruptcy filing announced in December, Dolphin Group ASA chairman Tim Wells and chief executive Atle Jacobsen said: "It is a difficult decision, but in light of the unpredictability of the oil price and subsequent spending cuts of our customers, it has become impossible to have the visibility needed to continue our business."

Prior to the bankruptcy filing, the Oslo-listed arm of Dolphin Group ASA had reportedly accumulated a nine-month loss of US$41.6 million as revenue slumped on "weak market fundamentals, unsustainable price levels and fierce competition (for) contracts". Its time charters on third-party vessels had also reportedly run afoul.

Demand for Dolphin's core seismic services was among the first hit on cutbacks in exploration and production spend by oil companies responding to slumps in oil and oil-linked liquefied natural gas prices since the second half of 2014.

Oil prices fell by half towards late 2014 and have been hovering at US$30s after hitting a 12-year low in the US$20s. Oil and gas companies have cut back drastically on offshore seismic and drilling on a lack of any sign in oil price rebounding to at least US$50-60, widely considered the minimum level to justify exploration spend.