As part of its long-term energy transition strategy, Archer Limited ("Archer") has signed an agreement to acquire 50% of the shares in renewable energy service company Iceland Drilling Company Ltd. ("Iceland Drilling") for a total consideration of USD 8.25 million. Kaldbakur ehf. will remain a large shareholder and will own the other 50%.
Iceland Drilling is an international deep geothermal drilling and integrated well service company, with seven decades of experience and competence in both high and low temperature geothermal environments. Headquartered in Iceland, the company employs 90 people and has an annual revenue of approximately USD 40 million. Iceland Drilling has drilled more than 500 deep geothermal wells since 1970 and owns a modern fleet of hydraulic drilling rigs automated for safe and efficient operations. The company has a track-record from challenging remote and isolated locations, and is currently managing drilling operations in Iceland, the Azores, and New Zealand as well as seven smaller rigs for district heating projects in Iceland.
Dag Skindlo, CEO of Archer:
"We are delighted to announce our investment in Iceland Drilling. Geothermal energy is a renewable energy source that offers a stable base load and has direct overlap and synergies with Archer’s core services. Iceland Drilling has a long track record with international operations and is a reputable brand in geothermal drilling and well services. The geothermal power market is part of the future energy mix and is, according to IEA and industry experts, set to grow meaningfully over the next decades with the annual geothermal deep well count estimated to increase from 200 to 700 wells by 2030. Furthermore, we believe the increased focus on district heating in Europe will drive increased growth and technological advances in this segment. Drilling and well services is what Archer does, and we believe we can utilize available rigs from our fleet and leverage our global footprint when growing the geothermal business. We look forward to continuing the development and expansion of Iceland Drilling together with management and an experienced industrial partner, Kaldbakur. This marks an important milestone towards our target to achieve net zero by 2050 with 35% revenues to come from energy transition activities by 2040. Archer will continue to consider investment opportunities and initiatives that will transform our portfolio and reduce greenhouse gas emissions."
Sigurður Sigurðsson , CEO of Iceland Drilling:
“We are pleased that Archer, with its global presence and proven track record, will join our efforts to further grow and develop Iceland Drilling. Together with methodological and technological advances in the industry, we can play a part in the much needed decarbonization of the world. It is a great vote of confidence for Iceland Drilling to have Archer as an investor in the company. Archer's expertise and experience will undoubtedly strengthen Iceland Drilling."
Eiríkur S. Jóhannsson, CEO of Kaldbakur:
“Kaldbakur will remain a key investor in Iceland Drilling, with 50% of the shares, and has great faith in the company's growth. We are confident those ambitions will materialize with a trusted partner like Archer."
Archer`s management will provide further information about the rationale for the acquisition in the scheduled quarterly release call August 12, 2022.
The closing of the transaction is expected to be finalized during third quarter 2022 subject to the approval by the Icelandic competition authorities.