ADES International acquires onshore drilling operations from Weatherford
LONDON and DUBAI -- 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 it has signed a definitive agreement with Weatherford International for the acquisition of 31 onshore drilling rigs for a purchase price of $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 12 rigs in Kuwait, 11 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 11 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 $150 million, while allowing the group to utilize its focused business model and leverage its economies of scale in existing markets. The acquired contracted rigs add an estimated cumulative backlog of $750 million, with a weighted average contract tenor of 4.5 years.
The transaction brings the number of ADES’ onshore rigs in MENA to 34, 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.
