Vantage Drilling Sells 2 Jackup Rigs to ADES

Vantage Drilling International Ltd. has completed the sale of two contracted premium jackup rigs to Saudi Arabia’s ADES Holding Company.

The sale includes the Topaz Driller jackup rig, operating in the Malaysia-Thailand Joint Development Area, and the Soehanah jackup rig, owned by Rig Finance Ltd. (RFL), which operates in Indonesia.

Vantage Drilling said in a news release that the divestment of the assets underscores its “strategic focus on expanding its managed services business and maintaining a flexible, asset-light model that optimizes capital allocation”.

Vantage Drilling CEO Ihab Toma said, “This transaction is a significant step in Vantage’s ongoing strategy to enhance shareholder value. By strategically selling these contracted rigs, we have shifted to a net cash position, allowing us to focus on expanding our managed services portfolio, which remains an area of focus for the Company. We are confident this approach will further strengthen our financial position while providing ongoing, high-quality services to our clients”.

“We are pleased to continue our strong partnership with ADES through this transaction. Southeast Asia is a key market, and the transfer of these rigs will enable ADES to further its expansion in the region, while Vantage remains well-positioned to grow its asset-light services business and deliver sustainable value to our shareholders,” Toma added.

International oil and gas drilling firm ADES in September announced an agreement to acquire the two rigs through its directly owned subsidiary ADES International Holding Ltd. for a total consideration of $190 million, subject to working capital and other adjustments at date of closing.

The acquisition is a strategic move to further solidify its presence in Southeast Asia, “a region poised for strong production growth against a backdrop of tight jackup market conditions,” ADES said in an earlier statement.

The addition of these two new rigs will enhance ADES' fleet in the India and SEA region, expanding its operations to seven jackup rigs across Indonesia, Thailand, India and a new operating territory in the joint development area of two important countries to the company, it said.

ADES Holding CEO Mohamed Farouk said, “This acquisition marks a significant milestone for ADES as we continue to expand our footprint in Southeast Asia, a region where we see tremendous growth potential. By acquiring these premium jackup rigs, we are not only enhancing our fleet but also entering a new, important market in the Malaysia-Thailand Joint Development Area. I am also pleased with our team’s ability to identify and swiftly execute the transaction, tapping into new markets, all while maintaining sustainable leverage levels as ADES utilizes the available financing commitments to pursue value accretive opportunities”.

“This transaction further solidifies our relationship with Vantage Drilling, building on our history of successful partnerships. The attractive valuation of this acquisition reflects our disciplined approach to capital allocation and our ability to capitalize on market opportunities. With our ‘contract acquisition’ model minimizing risk exposure, this acquisition is poised to have a direct and positive impact on our profitability, reinforcing our commitment to generating sustainable returns for our shareholders,” Farouk added.

Vantage Drilling International Ltd. describes itself as an offshore drilling contractor, with a current owned fleet of two ultra-deepwater drillships and two premium jackup drilling rigs. The company’s primary business is to contract drilling units, related equipment and work crews primarily on a day-rate basis to drill oil and natural gas wells globally for major, national and independent oil and gas companies.

To contact the author, email rocky.teodoro@rigzone.com