Seadrill Closes Sale Of Seven Jack-Ups To ADES

Seadrill Closes Sale Of Seven Jack-Ups To ADES
Seadrill Limited has closed the sale of seven jack-ups located in Saudi Arabia to ADES Arabia Holding.

Offshore driller Seadrill Limited has closed the sale of seven jack-ups located in Saudi Arabia to ADES Arabia Holding.

The initial deal for the share purchase agreement with subsidiaries of ADES Arabia Holding was signed on September 1. The rigs in question are the AOD I, AOD II, AOD III, West Callisto, West Ariel, West Cressida, and West Leda.

ADES will also employ the crews operating the rigs and will hold the drilling contracts related to the rigs. The total consideration for the jack-up sale is $628 million in cash, subject to adjustment for working capital and other items, and reimbursement to Seadrill for any project costs spent at the time of closing concerning the reactivation of the three stacked jack-ups, namely the West Ariel, West Cressida, and West Leda. This translates into around $100 million per rig on a ‘ready-to-drill’ basis.

Seadrill said that the proceeds from the jack-up sale would enable it to significantly de-leverage its balance sheet and eliminate outstanding capital expenditure for the West Ariel, West Cressida, and West Leda.

ADES has been shopping for rigs for some time now. Namely, it bought a large number of rigs from several companies since November last year. It first bought Noble Roger Lewis, Noble Scott Marks, Noble Joe Knight, and Noble Johnny Whitstine – all contracted by Saudi Aramco – from Noble Corporation. That was followed by a very active April this year with three acquisitions.

Namely, Maersk Drilling sold the Maersk Convincer jack-up rig to ADES for $42.5 million. In the same month, ADES bought four jack-up drilling rigs from Aban Offshore for $106 million and the Emerald Driller, Sapphire Driller, and Aquamarine Driller jack-ups from Vantage drilling. The April shopping spree ended with the acquisition of the Valaris 113 and 114 rigs for a price of $125 million.

In May, ADES also bought two KFELS B Class rigs from Keppel Offshore & Marine. These rigs were ordered in 2013 and 2014 but nothing came of them. This was beneficial for both parties as Keppel announced last year that it would be exiting the offshore rig-building business.

In other Seadrill-related news, it recently received approval to relist its common shares on the New York Stock Exchange under the ticker symbol SDRL. The company started trading on NYSE last Friday.

Due to the listing on the NYSE, Seadrill also applied to change the status of its listing at Euronext Expand from a primary listing to a secondary listing, and the Oslo Stock Exchange has approved the application. The change from primary to the secondary listing at Euronext Expand took effect on October 17.

“We are pleased to be re-listing the company on the NYSE. Our participation in the U.S. public markets should provide additional liquidity in our stock and provide access to new investors. We look forward to continuing our long history of strong engagement with our investment audience,” Seadrill CEO Simon Johnson said.

To contact the author, email bojan.lepic@rigzone.com



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