Offshore drilling contractor Seadrill on Thursday announced it has reached a deal to sell its three-rig fleet of jack-ups in Qatar.
The definitive agreement will see Seadrill sell the rigs West Castor, West Telesto and West Tucana, as well as its 50% equity interest in the joint venture that operates these rigs to the JV partner Gulf Drilling International (GDI) for cash proceeds of $338 million.
The transaction is subject to certain conditions, including approval or non-objection of the Qatar Financial Centre Authority and approval of the shareholders of GDI’s parent company, and is expected to close early in the third quarter of 2024, Seadrill said.
“Our divestiture of the Qatar jack-up fleet and exit from the joint venture are consistent with our ongoing efforts to strengthen and simplify our business and will allow us to focus on Seadrill’s core business: operating deepwater rigs across the Golden Triangle and similarly advantaged geographies,” said Simon Johnson, Seadrill's president and CEO. “We believe that our strengthened liquidity position upon completion of the jack-up sale, coupled with our conviction in the deepwater floater market outlook and Seadrill’s competitive positioning within it, supports the expansion of our share repurchase program.”
Concurrent with the announcement, Seadrill revealed its board of directors has increased the company’s aggregate share repurchase authorization, allowing it to repurchase up to an additional $500 million of its outstanding common shares over a two-year period commencing after the current share repurchase program is completed.
Unlike the company’s prior repurchase programs, Seadrill may choose not to initiate a non-discretionary repurchase program when the incremental authorization becomes effective. The incremental authorization may be modified, suspended or discontinued at any time.
