Rowan Companies has entered into an agreement to purchase Skeie Drilling & Production ASA (“SKDP”), subject to satisfactory due diligence and approval by Rowan’s board of directors, both of which must occur by 19 July 2010 or the agreement will terminate.
Upon completion of the transaction, Rowan will own 50.3% of SKDP’s outstanding ordinary shares and will tender for the remaining SKDP ordinary shares on the same terms.
Norway-based SKDP owns and manages the construction of three high-spec jackup rigs, designated “N-class,” designed and being built by Keppel FELS in Singapore. The expected deliveries of the rigs are September 2010, December 2010 and June 2011 – although SKDP is negotiating an option to delay each rig by up to six months in exchange for a higher final payment.
Matt Ralls, Rowan president and CEO, commented, “We are excited about this opportunity to acquire three high-spec jackups at a significant discount to current replacement cost. The N-class has been designed and will be equipped for demanding drilling requirements in harsh environments, including the Norwegian market, which has a history of very high utilization and dayrates compared to most jackup markets.”
He added: “Rowan’s financial condition affords us this opportunity to expand the earnings power of the company through manageable levels of assumed debt and construction commitments. This transaction is consistent with our stated objective of growing our offshore drilling business though the addition of high-spec equipment and enables further global geographic and customer diversification of our drilling operations. Upon closing, Rowan will own 10 of the top 12, and 14 of the top 22, jackups in the global fleet today or under construction, based upon ODS-Petrodata rankings.”
Mr Ralls also welcomed Bjarne Skeie as “a significant shareholder of Rowan. He has built an impressive organization at SKDP that should enable Rowan to advance our entry into the Norwegian drilling market.”