Parker Drilling Company today announced that it has executed a definitive agreement with The Shell Petroleum Development Corporation of Nigeria Limited (SPDC) to sell its Barge Rigs 73 and 75 and related assets located in Nigeria for $46 million.
The Company has already received a 10% deposit toward the purchase price and anticipates closing the transaction in late June, subject to customary closing conditions. The Company anticipates that it will recognize a gain of $2.0 to $2.5 million as a result of the sale.
This transaction will be accretive to earnings, as first quarter 2006 cash flow from the Nigeria barge operations was slightly above breakeven. The Company intends to use net proceeds to pay down debt, further enhancing earnings by reducing interest expense.
"This sale is another positive step in our strategic plan to optimize returns on our asset base and to focus on core strategic markets. Going forward, it will also better position us for long-term consistent profitability," said Robert L. Parker, Jr., chairman, president and chief executive officer.
Parker Drilling is a Houston-based global energy company specializing in offshore drilling and workover services in the Gulf of Mexico and international land and offshore markets. Parker also owns Quail Tools, a provider of premium industry rental tools. Parker Drilling employs approximately 3,000 people worldwide and will have 45 marketed rigs after the sale of the Nigeria barge rigs.