Bristow Group completes sale of Gulf of Mexico aircraft to Rotorcraft

Bristow Group announced it has completed the previously announced sale of 53 single-engine aircraft and related assets operating in the U.S. Gulf of Mexico to Rotorcraft Leasing Company, L.L.C. for approximately $65 million. Bristow received approximately 20% of the purchase price at closing, with the remainder to be paid from escrow as title transfers are processed by the Federal Aviation Administration. In addition to the aircraft, the sale also included related inventory, spare parts, offshore fuel equipment and two operational bases.

As a result of the sale, Bristow expects to record a pre-tax gain of approximately $40 million, or $0.72 per diluted share after tax, in its December 31, 2008 quarter. The gain may vary depending upon on the actual inventory of spare parts and other equipment transferred at closing. The majority of the gain relates to the U.S. Gulf of Mexico business unit, while a smaller portion relates to the Western Hemisphere Centralized Operations business unit.

“The sale of these aircraft is a continuation of our growth strategy to redeploy capital into newer, larger high-technology aircraft capable of operating further offshore and in harsh environments — and in the process generating higher returns for the Company,” said William E. Chiles, President and Chief Executive Officer of Bristow Group.

In connection with the transaction, Bristow entered into a Transition Services Agreement with Rotorcraft under which Bristow will operate these aircraft until all 53 are transferred to Rotorcraft’s aircraft operating certificate with the U.S. Federal Aviation Administration. As a result, Bristow may experience some reduction in U.S. Gulf of Mexico business unit margins in the next few months, depending on several factors, including utilization rates and the timing of the transition of the aircraft to Rotorcraft’s aircraft operating certificate.

In addition, Rotorcraft has entered into agreements to service Bristow’s former customer contracts that were supported by these aircraft. The contracts generated revenues of $10.1 million in the quarter ended September 30, 2008, representing 16.1% of revenue from the U.S. Gulf of Mexico business unit and 3.5% of consolidated revenues.

Bristow was advised on the transaction by Parks Paton Hoepfl & Brown, an energy investment banking firm.