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ADES to acquire 31 Middle East rigs from Weatherford

Jul 12, 2018
4 min read
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ADES International said it signed a US$288 million deal with Weatherford to acquire its 31 onshore drilling rigs in Saudi Arabia, Kuwait and Algeria. 

The London-listed oil and gas drilling and production services company, ADES said it is buying out the rigs to strengthen its onshore capabilities.

Along with the rigs, 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.

The deal will be financed through a combination of cash and secured debt instruments, and is expected to close in the second half of 2018, the company said.

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.

ADES said Weatherford has built a substantial presence and track record in these countries, which will enable ADES to expand its presence across attractive pre-selected markets within the Middle East and Africa, consistent with its strategy. It currently has four onshore drilling rigs in the MENA region.

“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,” said Dr. Mohamed Farouk, chief executive officer of ADES International Holding.

“The new assets under ADES’ umbrella reinforce its position in the Saudi Arabian and Algerian markets and mark the expansion of its regional footprint into Kuwait and Southern Iraq. The acquisition of onshore drilling operations in Kuwait will now allow ADES to identify new opportunities and actively participate in tenders in this strategic market,” he added.

The rigs are expected to generate an annual revenue of US$150 million, while the contracted rigs add an estimated cumulative backlog of US$750 million, with a weighted average contract tenor of 4.5 years.

Mark McCollum, president and chief executive officer of Weatherford said: “ADES is acquiring an efficient fleet of land drilling rigs and a dedicated workforce with more than 60 years of experience in delivering drilling efficiency, operational excellence, and first-class safety. It was very important to us to find a buyer who will continue to provide the same level of service quality, safety and dedication to our customers in this region.”

Along with the rigs, 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.

ADES said Weatherford has built a substantial presence and track record in these countries, which 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.

ADES previously has four onshore drilling rigs in the MENA region.

“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,” said Dr. Mohamed Farouk, chief executive officer of ADES International Holding.

“The new assets under ADES’ umbrella reinforce its position in the Saudi Arabian and Algerian markets and mark the expansion of its regional footprint into Kuwait and Southern Iraq. The acquisition of onshore drilling operations in Kuwait will now allow ADES to identify new opportunities and actively participate in tenders in this strategic market,” he added.

The rigs are expected to generate an annual revenue of US$150 million, while the contracted rigs add an estimated cumulative backlog of US$750 million, with a weighted average contract tenor of 4.5 years.

Mark McCollum, president and chief executive officer of Weatherford said: “ADES is acquiring an efficient fleet of land drilling rigs and a dedicated workforce with more than 60 years of experience in delivering drilling efficiency, operational excellence, and first-class safety. It was very important to us to find a buyer who will continue to provide the same level of service quality, safety and dedication to our customers in this region.”

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