Shelf Drilling Buying Five Noble Rigs For $375 Million
UAE-based offshore drilling contractor Shelf Drilling has signed a deal to acquire five jack-up rigs from Noble Corporation which could be the solution to UK competition regulator concerns over Noble’s merger with Maersk Drilling.
Noble Corporation entered into an asset purchase agreement to sell five jack-up rigs for $375 million to a newly formed subsidiary of Shelf Drilling whose obligations under the asset purchase agreement will be guaranteed by Shelf Drilling.
The sale, subject to approval of the UK Competition and Markets Authority (CMA), is intended to address the potential concerns identified by the CMA in the Phase I review of the proposed business combination between Noble and Maersk Drilling.
The proposed merger between Noble and Maersk Drilling was announced in November 2021. The UK’s CMA launched its merger inquiry in February 2022. Before the CMA’s decision, Noble and Maersk announced that they would have to sell certain North Sea rigs to get the UK regulator’s clearance. Following the announcement, the CMA claimed that it might accept a remedy proposal.
This so-called ‘remedy rig sale agreement’ includes the rigs Noble Hans Deul, Noble Sam Hartley, Noble Sam Turner, Noble Houston Colbert, and Noble Lloyd Noble and all related support and infrastructure.
Associated offshore and onshore staff are expected to transfer with the rigs. Following the sale, Noble expects to continue to perform the current drilling program for the Noble Lloyd Noble under a bareboat charter arrangement with Shelf Drilling until the second quarter of 2023 when the primary term of its current drilling contract is expected to end.
The charter arrangement would pass the economic benefit of the drilling contract to Shelf Drilling. Drilling contracts for other rigs are expected to be novated to the buyer, subject to the clients' consent. Noble will provide certain customary transition support services to the buyer for a limited period.
Shelf Drilling is expected to finance the acquisition through equity and debt financings, but the purchase is not conditioned on such financing. The remedy rig sale is expected to close promptly following the closing of the Noble-Maersk Drilling merger and following the receipt of CMA approval. If the buyer, remedy rig sale agreement, and the remedy proposal are accepted by the CMA, the closing of the merger is expected to occur near the end of the third quarter of 2022.
In connection with the merger, Noble currently expects to launch the planned exchange offer for shares of Maersk Drilling in August 2022. In addition to the CMA approval, completion of the merger remains subject to acceptance by holders of at least 80 percent of Maersk Drilling shares, the listing of Noble shares on the NYSE and Nasdaq Copenhagen, and other customary conditions.
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