Samson Investment Company and Subsidiaries - Page 5

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          fleet of 42 deep well drilling rigs, utilizing the most modern              
          equipment in the industry.  In 1981, CDC placed orders for the              
          components needed to fabricate 42 rigs, at a total purchase price           
          of $263 million.  During 1981 and 1982, CDC completed fabrication           
          of 22 drilling rigs.  Drilling rigs are highly complex pieces of            
          equipment that require extensive and frequent maintenance to                
          remain operational.  At its peak in 1981 and 1982, CDC had more             
          than 500 employees.                                                         
               To fund the construction of its new rig fleet, CDC secured             
          purchase money financing from sellers of rig components, obtained           
          standard bank financing, and entered into sale-leaseback                    
          arrangements.  In 1981, CDC entered into transactions with                  
          Metromedia, Inc. (Metromedia), and Atlantic Richfield Co. (ARCO).           
          CDC sold 10 of its new drilling rigs to Metromedia and ARCO and             
          then leased the rigs from the purchasers.  These lease agreements           
          (safe harbor leases) were supported by letters of credit.  Under            
          the terms of the safe harbor leases, CDC was required to maintain           
          its corporate existence and maintain insurance against                      
          customarily insured losses and could not dispose of substantially           
          all of its assets.                                                          
               In December 1981, CDC established a deposit account with               
          First National Bank of Seattle (Seattle-First), as required by              
          the letter of credit agreement related to the ARCO safe harbor              
          lease.  As the tax benefits accrued to ARCO, the amount required            
          to secure the tax benefits declined, and funds were released to             
          CDC (or later placed in a cash collateral account).                         


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