Gulf Oil and Gas accountACCOUNT

ADES Signs PSA for 3 Operational Offshore Jack-up Rigs

Source: www.gulfoilandgas.com 12/20/2017, Location: Middle East

Share |
ADES International Holding Ltd. (ADES), the London-listed company providing offshore and onshore oil and gas drilling and production services in the Middle East and Africa through its subsidiaries, has signed a Purchase and Sale Agreement (PSA) with Nabors Drilling International II Limited, a subsidiary of Nabors Industries Ltd ("Nabors") (NYSE: NBR). to acquire three operating offshore jack-up rigs currently contracted by a major national oil company in the Arabian Gulf for a total purchase price of US$83 million, payable in a combination of cash and ADES shares (the "Transaction").

The PSA also provides for the existing drilling contracts associated with the rigs to be transferred to ADES.

Transaction Highlights
Consideration for the Transaction will include a cash payment equivalent to 75% of the total Transaction value and the remaining 25% will be paid in the form of newly issued shares of ADES ("Consideration Shares").
The total number of Consideration Shares was calculated using the closing mid-market price of ADES shares on 18 December 2017, being the business day prior to the Transaction signing date.
Consideration Shares issued to Nabors as part of the transaction will be subject to a three-month lockup period. In total, the acquisition is expected to add approximately US$60 million annually to ADES' Group revenue, while maintaining margins and thereby further enhancing Group earnings.
The Transaction is expected to close in Q1 2018, subject to the fulfilment of the conditions precedent as agreed in the PSA, including the renewal of current drilling multi-year contract terms.

About the Acquired Rigs
The three ultra-shallow drilling rigs have each been in continuous service for more than 10 years, making them among the most in-demand assets in the region.
The rigs have recently been refurbished, with five-year inspections already implemented on two rigs and the third is due in 2018.
Once completed, the Transaction will bring the number of the Group's rigs under contract in the Arabian Gulf to six, further cementing ADES' position as a major low-cost operator of offshore drilling rigs in the region.
ADES and Nabors will collaborate to advance the integration and automation technology initiatives of Nabors Drilling Solutions and Canrig, including automating rig surface and downhole activities, within the offshore drilling space in the Middle East and beyond. Specifically, the companies will set up a high level technical, operational and commercial taskforce with the objective of introducing the Nabors value proposition within the region utilising ADES rigs.

ADES shall, in due course, invite its Shareholders to vote on a special resolution for the issuance and allotment of shares to be issued to Nabors in connection with this Transaction.

ADES is also finalising a separate PSA with Nabors to acquire two stacked offshore jack-up rigs in a similar cash and shares deal which, in line with the Company's strategy of minimising risk, will be contingent on the awarding of specified drilling contracts. Progress on these negotiations will be announced in due course.

Commenting on the acquisition, Dr. Mohamed Farouk, Chief Executive Officer of ADES International Holding, said: "We are delighted to announce the signing of the PSA to purchase these rigs, which once closed, will double our Arabian Gulf fleet and number of contracted rigs. The acquisition will enhance the Group's position in the region's offshore drilling fields and serves as testimony to the confidence our clients have placed in us.

Nabors has a significant track record and strong operational experience in the oilfield services sector and we are very pleased with their decision to become a shareholder in the Group. We view their continued involvement and alignment with ADES, including the provision of access to their state of the art drilling technology, as a positive reinforcement of their confidence in our business.

On completion, the acquisition will have an immediate substantial and positive impact on our revenues and ADES' cash flow-generating ability, and is in line with our post-IPO growth strategy of scaling-up operations in existing and target markets."

Rigs >>

Rigs News in United Arab Emirates >>

Norway >>  7/13/2018 - Maersk Drilling has been awarded contract extensions for the high-efficiency jack-up rigs Maersk Resolute and Maersk Resolve by Petrogas E&P Netherlan...
Congo >>  7/11/2018 - Anglo African Oil & Gas plc, an independent oil and gas developer, is pleased to announce the mobilisation of the SMP-102 rig which has been contracte...

Saudi Arabia >>  7/11/2018 - A subsidiary of Weatherford International plc has signed a definitive agreement with ADES International Holding Ltd. for the sale of Weatherford's lan...
Kuwait >>  7/9/2018 - Precision Drilling Corporation has announced the award of one new build ST-3000 drilling rig in Kuwait under a five year take-or-pay contract with an ...

Argentina >>  7/6/2018 - Echo Energy plc, the Latin American focused upstream oil and gas company, has announced that mobilisation of the Quintana 01 testing / completion rig ...
Ghana >>  7/6/2018 - The Stena Forth will commence Operations in Ghana around end Q3 and has been contracted for an initial three-well campaign with a series of options. T...

Related Categories: General  Rig Equipment  Rig Operators  Rigs, Coring & Exploration 

Related Articles: General  Rig Equipment  Rig Operators  Rigs, Coring & Exploration 


United Arab Emirates Oil & Gas 1 >>  2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 |

More News

 

Oil & Gas Companies in United Arab Emirates >>


Related Links

Gulf Oil and Gas
Copyright Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.