TIDMADES
RNS Number : 8601Z
ADES International Holding
20 December 2017
ADES signs PSA for three operational offshore jack-up rigs in
the Arabian Gulf
(London & Dubai, 20 December 2017) ADES International
Holding Ltd. ("ADES" or the "Group") (LON: ADES), the London-listed
company providing offshore and onshore oil and gas drilling and
production services in the Middle East and Africa through its
subsidiaries, has signed a Purchase and Sale Agreement (PSA) with
Nabors Drilling International II Limited, a subsidiary of Nabors
Industries Ltd ("Nabors") (NYSE: NBR). to acquire three operating
offshore jack-up rigs currently contracted by a major national oil
company in the Arabian Gulf for a total purchase price of US$83
million, payable in a combination of cash and ADES shares (the
"Transaction").
The PSA also provides for the existing drilling contracts
associated with the rigs to be transferred to ADES.
Transaction Highlights
-- Consideration for the Transaction will include a cash payment
equivalent to 75% of the total Transaction value and the remaining
25% will be paid in the form of newly issued shares of ADES
("Consideration Shares").
-- The total number of Consideration Shares was calculated using
the closing mid-market price of ADES shares on 18 December 2017,
being the business day prior to the Transaction signing date.
-- Consideration Shares issued to Nabors as part of the
transaction will be subject to a three-month lockup period.
-- In total, the acquisition is expected to add approximately
US$60 million annually to ADES' Group revenue, while maintaining
margins and thereby further enhancing Group earnings.
-- The Transaction is expected to close in Q1 2018, subject to
the fulfilment of the conditions precedent as agreed in the PSA,
including the renewal of current drilling multi-year contract
terms.
About the Acquired Rigs
-- The three ultra-shallow drilling rigs have each been in
continuous service for more than 10 years, making them among the
most in-demand assets in the region.
-- The rigs have recently been refurbished, with five-year
inspections already implemented on two rigs and the third is due in
2018.
-- Once completed, the Transaction will bring the number of the
Group's rigs under contract in the Arabian Gulf to six, further
cementing ADES' position as a major low-cost operator of offshore
drilling rigs in the region.
-- ADES and Nabors will collaborate to advance the integration
and automation technology initiatives of Nabors Drilling Solutions
and Canrig, including automating rig surface and downhole
activities, within the offshore drilling space in the Middle East
and beyond. Specifically, the companies will set up a high level
technical, operational and commercial taskforce with the objective
of introducing the Nabors value proposition within the region
utilising ADES rigs.
ADES shall, in due course, invite its Shareholders to vote on a
special resolution for the issuance and allotment of shares to be
issued to Nabors in connection with this Transaction.
ADES is also finalising a separate PSA with Nabors to acquire
two stacked offshore jack-up rigs in a similar cash and shares deal
which, in line with the Company's strategy of minimising risk, will
be contingent on the awarding of specified drilling contracts.
Progress on these negotiations will be announced in due course.
Commenting on the acquisition, Dr. Mohamed Farouk, Chief
Executive Officer of ADES International Holding, said:
"We are delighted to announce the signing of the PSA to purchase
these rigs, which once closed, will double our Arabian Gulf fleet
and number of contracted rigs. The acquisition will enhance the
Group's position in the region's offshore drilling fields and
serves as testimony to the confidence our clients have placed in
us.
Nabors has a significant track record and strong operational
experience in the oilfield services sector and we are very pleased
with their decision to become a shareholder in the Group. We view
their continued involvement and alignment with ADES, including the
provision of access to their state of the art drilling technology,
as a positive reinforcement of their confidence in our
business.
On completion, the acquisition will have an immediate
substantial and positive impact on our revenues and ADES' cash
flow-generating ability, and is in line with our post-IPO growth
strategy of scaling-up operations in existing and target
markets."
-Ends-
Enquiries
ADES International
Holding
Hussein Badawy
Investor Relations ir@adesgroup.com
Officer
T: +2 (0)2 2527
7111
Instinctif
+44 (0)20
David Simonson david.simonson@instinctif.com 7457 2020
+44 (0)20
Laura Syrett laura.syrett@instinctif.com 7457 2020
+44 (0)20
George Yeomans george.yeomans@instinctif.com 7457 2020
NOTES TO EDITORS
About ADES International Holding
ADES International Holding extends oil and gas drilling and
production services through its subsidiaries and is a leading
service provider in the Middle East and Africa, offering onshore
contract drilling as well as workover and production services in
Egypt, Algeria and Saudi Arabia. The company is pre-qualified in
markets including Egypt, Saudi Arabia, Algeria, India, Mexico and
the Saudi-Kuwaiti Neutral Zone. Its over 1,200 employees serve
clients including major national oil companies ("NOCs") such as
Saudi Aramco and Sonatrach as well as joint ventures of NOCs with
global majors including BP and Eni. While maintaining a superior
health, safety and environmental record, the Group currently has a
fleet of nine jack-up offshore drilling rigs, three onshore
drilling rigs, a jack-up barge, and a mobile offshore production
unit ("MOPU"), which includes a floating storage and offloading
unit.
The Group is the largest offshore drilling operator in Egypt by
number of rigs. investors.adihgroup.com
About Nabors Industries
Nabors Industries (NYSE: NBR) owns and operates the world's
largest land-based drilling rig fleet and is a provider of offshore
platform rigs in the United States and numerous international
markets. Nabors also provides directional drilling services,
performance tools, and innovative technologies for its own rig
fleet and those of third parties. Leveraging our advanced drilling
automation capabilities, Nabors highly skilled workforce continues
to set new standards for operational excellence and transform our
industry.
investor.Nabors.com
Forward--looking statements
Certain statements contained in this announcement, including any
information as to the Group's strategy, plans or future financial
or operating performance constitute "forward looking statements".
These forward-looking statements can be identified by the use of
forward looking terminology, including the terms "believes",
"estimates", "anticipates", "projects", "expects", "intends",
"aims", "plans", "predicts", "may", "will", "seeks" or "should" or,
in each case, their negative or other variations or comparable
terminology, or by discussions of strategy, plans, objectives,
goals, future events or intentions. These forward-looking
statements include all matters that are not historical facts. They
appear in a number of places throughout this announcement and
include statements regarding the intentions, beliefs or current
expectations of the Directors of the Company concerning, amongst
other things, the Group's results of operations, financial
condition and performance, prospects, growth and strategies and the
industry in which the Group operates.
By their nature, forward looking statements address matters that
involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future.
Forward looking statements are not guarantees of future performance
and the Group's actual results of operations and financial
condition, and the development of the business sector in which the
Group operates, may differ materially from those suggested by the
forward-looking statements contained in this announcement. In
addition, even if the Group's results of operations and financial
condition, and the development of the industry in which the Group
operates, are consistent with the forward-looking statements
contained in this announcement, those results or developments may
not be indicative of results or developments in subsequent
periods.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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