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ADES Completes Acquisition of Three Offshore Rigs from Nabors

Source: www.gulfoilandgas.com 6/13/2018, Location: Middle East

ADES International Holding Ltd., 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 announced that, following its initial announcement in December 2017, the Group has completed the acquisition of three operating offshore jack-up rigs in the Arabian Gulf from subsidiaries of Nabors Industries Ltd.

Transaction Highlights

· The Transaction was completed for a total purchase price of US$83 million, payable in a combination of cash and ADES shares.

· Consideration for the Transaction includes a cash payment equivalent to 75% of the total Transaction value and the remaining 25% paid in the form of newly issued shares of ADES ("Consideration Shares"), approved by shareholders at the ADES EGM on 18 March 2018.

· The acquisition is expected to add approximately US$60 million annually to ADES' revenue, while maintaining the Group's margins.

The acquisition closed on 12 June 2018, following the fulfilment of the Conditions Precedent agreed upon in the Purchase and Sale Agreement (PSA), which included the renewal of two of the rigs' expired drilling contracts. The rigs are currently contracted by a major national oil company in the Arabian Gulf and are expected to add approximately US$140 million to ADES' backlog, while enabling the Group to capitalise on its existing presence in the region.

The acquired rigs have been renamed to Admarine 655, Admarine 656 and Admarine 657. Admarine 655 is currently undergoing an ABS recertification process in the shipyard, while Admarine 656 and Admarine 657 will generate revenue immediately, with their material impact expected to be weighted towards 2H2018 earnings.

Commenting on the acquisition, Dr. Mohamed Farouk, Chief Executive Officer of ADES International Holding, said:

"This Transaction adds three offshore drilling rigs to our existing fleet, thereby enhancing our position in our core business and reflecting our continued commitment to the Arabian Gulf's offshore shallow water drilling market. The acquisition brings our jack-up offshore drilling rigs to thirteen, making us one of the main players in the MENA region.

"The Transaction will have a positive impact our 2H2018 revenues and ADES' cash flow-generating ability, and we look forward to expanding further across the GCC markets through new value-accretive acquisitions and tenders."

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Related Categories: General  Rig Equipment  Rig Operators  Rigs, Coring & Exploration 

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