H&P Closes KCA Deutag Acquisition

Helmerich & Payne, Inc. (H&P) has completed its acquisition of global onshore drilling firm KCA Deutag International Limited.
H&P announced the $1.97 billion transaction in July 2024.
With the acquisition, H&P said it expects to deliver near- and long-term growth and value creation by accelerating its international growth strategy by “significantly increasing” its Middle East presence, according to a company news release.
The company also expects to enhance scale and diversification, "with a robust geographic and operational mix across U.S. and international crude oil and natural gas markets,” it said.
H&P will remain headquartered in Tulsa, Oklahoma, and John Lindsay continues to serve as President and CEO. KCA Deutag CEO Joseph Elkhoury will not continue with H&P, according to the release.
Lindsay said, “We are excited to complete this transformative acquisition and welcome KCA Deutag’s talented employees to H&P. Today marks an important milestone for our company, customers and shareholders as we create an organization with an enhanced global footprint, exceptional service capability and superior technology [offerings]. We are focused on ensuring a seamless transition and delivering on the strategic and financial benefits of the transaction”.
Lindsay continued, “Over the past several months, team members across the company have been diligently working on the planning associated with this integration and providing excellent service to our customers. I am appreciative of and impressed by the entire team across our global operations for all of their hard work and commitment. I’d also like to thank KCA Deutag CEO Joseph Elkhoury for his support throughout this integration planning process and wish him the best in his future endeavors”.
H&P stated that it expects to provide an updated outlook for fiscal year 2025 in connection with reporting fiscal first quarter 2025 results.
KCA Deutag has a significant land drilling presence in the Middle East with additional operations in South America, Europe, and Africa. In addition to its land operations, KCA Deutag has asset-light offshore management contract operations in the North Sea, Angola, Azerbaijan and Canada, with super major customers and long-term earnings visibility through a robust backlog. KCA Deutag’s Kenera segment comprises manufacturing and engineering businesses, including Bentec, with three facilities serving the energy industry, representing a longer-term growth opportunity, according to an earlier release.
The transaction was funded with cash on hand and new borrowings. Given its projected cash flow generation and increased visibility with long-term contracts, H&P said it will “be well-positioned to quickly reduce debt utilizing pre-payable term loans, newly issued bonds with staggered maturities and strong cash flows”.
The acquisition adds to H&P a complementary asset-light offshore management contract business, primarily comprising 29 offshore platform rigs under management, and a manufacturing and engineering business.
Founded in 1920, H&P delivers technology and engineering solutions. Through its subsidiaries, the company designs, fabricates and operates high-performance drilling rigs in conventional and unconventional plays around the world, according to the release. H&P also develops and implements advanced automation, directional drilling and survey management technologies, it said.
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