ADES Acquires 31 Onshore Drilling Rigs in Kuwait, Saudi Arabia, Algeria
LONDON & DUBAI, United Arab Emirates--(BUSINESS WIRE)-- ADES International Holding Ltd. (“ADES” or the “Company”) (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, is pleased to announce that it has signed a definitive agreement with Weatherford International plc (“Weatherford”) for the acquisition of thirty-one onshore drilling rigs (the “Transaction”) for a purchase price of c.US$ 287.5 million, in line with its strategy to strengthen its onshore capabilities.
The Transaction will be financed through a combination of cash and secured debt instruments, and is expected to close in the second half of 2018, subject to customary closing conditions agreed upon in the agreement.
As part of the Transaction, ADES will acquire Weatherford’s onshore drilling operations, including their associated assets, contracts, management systems and approximately 2,300 employees and contract personnel spread across Algeria, Kuwait and Saudi Arabia, where Weatherford has built a substantial presence and track record that will enable ADES to expand its presence across attractive pre-selected markets within the Middle East and Africa, consistent with its strategy.
The acquired assets consist of twelve rigs in Kuwait, eleven rigs in Saudi Arabia, six rigs in Algeria and two rigs in Southern Iraq. Twenty of the acquired 31 rigs are currently operational and the remaining eleven will be used in tendering activities and for strategic inventory purposes that will enable ADES to continue to grow in these attractive markets within the Middle East and Africa. Upon completion of the Transaction, the rigs are expected to generate an annual revenue of US$150 million, while allowing the group to utilise its focused business model and leverage its economies of scale in existing markets. The acquired contracted rigs add an estimated cumulative backlog of US$750 million, with a weighted average contract tenor of 4.5 years.
The Transaction brings the number of ADES’ onshore rigs in MENA to thirty-four, significantly increasing its onshore capabilities and cementing the group’s position as a major drilling contractor for both onshore and offshore markets in the region.
Dr. Mohamed Farouk, Chief Executive Officer of ADES, said: “We are truly delighted to have signed this agreement with Weatherford, where its reputation as one of the world’s largest oilfield service companies and its deep-rooted knowledge and experienced professionals in over 90 countries guarantees that this substantial asset and personnel addition will be a net positive for ADES. This landmark transaction significantly expands ADES’ total fleet and more than doubles its operational fleet, in line with our strategy of executing smart acquisitions, alongside building our backlog and participation in tenders. ADES is committed to the swift value extraction of its acquired assets utilising the Company’s focused business model.”
View the full announcement here.
Source: ADES International Holding Ltd.