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Newly created Norwegian drilling contractor Borr Drilling said on Monday that it had signed a deal to acquire the entire fleet of 15 high-specification jack-up rigs of Transocean for around $1.35 billion.
Borr Drilling – set up last year by managers who had left Seadrill and aiming to acquire low-price drilling assets – will be buying Transocean’s 10 rigs in its fleet and 5 new-builds under construction at Keppel FELS Limited.
The deal is subject to the parties signing and executing definitive agreements and meeting closing conditions that include final approval by the board of directors of both Borr Drilling and Transocean, the Norwegian company said.
The transaction is expected to be completed by the end of May this year, Borr Drilling noted.
The Norwegian company will finance part of the deal via $800 million worth of new equity it is raising, Borr Drilling said in a separate press release today. The proceeds of the equity offering of 228,600,000 new shares priced at $3.5 each will be used to secure the funding of the acquisition of Transocean’s jack-up fleet.
According to Carnegie brokerage analyst Frederik Lunde, who told Reuters, commenting on the average price of the deal for Transocean’s rigs:
“That’s half the construction cost, so it’s a pretty attractive deal.”
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Upon reporting its 2016 results last month, Transocean said that it owns or partially owns and operates a fleet of 56 mobile offshore drilling units. They are 30 ultra-deepwater floaters, 7 harsh-environment floaters, 3 deepwater floaters, 6 midwater floaters and 10 high-specification jack-ups. Transocean also said that it had 4 ultra-deepwater drillships and 5 high-specification jack-ups under construction or under contract to be constructed.
Borr Drilling’s shares are currently traded on the Norwegian over-the-counter (OTC) market, and the company plans listing on a reputable stock exchange later this year.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.