ADES Charters Two More Jack-Ups From Keppel O&M

Keppel Offshore & Marine has signed bareboat charter contracts with ADES Saudi Limited Company for two jack-up rigs to be deployed in Saudi Arabia.

This brings the total number of rigs Keppel O&M has on charter with ADES to four. The charters will be for a period of five years, expected to begin in the first half of 2023, and projected to generate total revenue of about $113 million for Keppel O&M, which includes modification works to prepare the rigs for deployment.

“These are the fifth and sixth bareboat charters secured by Keppel O&M this year, pointing to the continued demand for more high-quality drilling rigs of Keppel’s proven KFELS B Class design,” the company said.

The two rigs to be used for these charters are the Cantarell III and Cantarell IV jack-up rigs which were under bareboat charters with subsidiaries of Grupo R. These charters have since been terminated due to unremedied events of default under the bareboat charters by the charterers.

The rigs, which will be renamed ADM685 and ADM686, are currently in Mexico and will be transported to Saudi Arabia for modification works before commencing their charters for ADES.                   

“We are pleased to receive a repeat contract from ADES for the charter of another two of our jack-up rigs. These high-performance rigs have been operating successfully in Mexico and can be easily mobilized to work in Saudi Arabia. They are equipped with our AssetCare digitalization solution which increases the efficiency, safety, and operability of the rigs.”

“All of our KFELS B Class legacy jack-up rigs have secured bareboat charters or are on contract, which reflects the value our rigs bring to rig operators and increases their marketability for sale to potential buyers and investors. Utilization rates across both the jack-up and floater segments have continued to trend upwards, and we are confident our versatile and robust legacy rigs will be in demand across a variety of markets,” Tan Leong Peng, Managing Director for Newbuilds at Keppel O&M, said.

As part of the definitive agreements Keppel Corporation has signed in connection with the proposed combination of Keppel O&M and Sembcorp Marine, these two rigs are part of Keppel O&M’s legacy rigs and they, as well as their bareboat charter agreements will be transferred to Asset Co that is majority-owned by external investors on legal completion.

The above bareboat charter contracts are not expected to have any material impact on the net tangible assets and earnings per share of Keppel Corporation for the current financial year.

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