Dubai-based Shelf Drilling has entered into agreement with affiliates of China Merchants & Great Wall Ocean Strategy & Technology Fund for the acquisition of two newbuild jackup rigs.
Under the agreement, Shelf Drilling will buy the two rigs from China Merchants for $87m each. The company will issue new shares to raise $174m to fund the acquisition.
The acquisitions are expected to be completed during the second quarter.
Additionally, the company also agreed to charter two additional jackup rigs with options to buy them.
“We consider this a transformational transaction for the company. The acquisition of two premium jack-up rigs and the option to buy two further premium jack-up rigs will significantly enhance our fleet at an attractive price and an appropriate funding structure demonstrating our focus on capital discipline. We believe that the combination of Shelf Drilling’s unique operating platform, low cost structure and customer relationships, along with China Merchants’ demonstrated rig construction capabilities will create compelling value for all our stakeholders. We look forward to working with China Merchants as a strategic partner,” said David Mullen, CEO of Shelf Drilling.
Shelf Drilling currently operates a fleet of 38 jackup rigs.