ADES Signs PSA for Three Operational Offshore Jack-up Rigs in the Arabian Gulf
20 December 2017 - 8:12PM
Business Wire
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.”
The full announcement including legal disclaimers is available
at:
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/ADES/13471768.html
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171220005333/en/
ADES International HoldingHussein BadawyInvestor
Relations OfficerT: +2 (0)2 2527
7111ir@adesgroup.comorInstinctifDavid
Simonsondavid.simonson@instinctif.com+44 (0)20 7457 2020
Ades (LSE:ADES)
Historical Stock Chart
From Apr 2024 to May 2024
Ades (LSE:ADES)
Historical Stock Chart
From May 2023 to May 2024