Offshore drilling firm Vantage Drilling has agreed to sell its subsidiary Emerald Driller Company (“EDC”) to ADES for $170,000,000 in cash subject to certain adjustments.
EDC is the owner of the Emerald Driller jackup rig, which is operating in Qatar, and will own prior to the closing of the sale transaction the Sapphire Driller jackup rig and the Aquamarine Driller jackup rig and their respective drilling contracts, which are expected to start operations in Qatar in the first and second quarter of 2022, respectively.
Also, at the closing of the transaction, subsidiaries of Vantage and ADES agreed to enter into a support services agreement, under which a subsidiary of Vantage will provide support services to ADES in respect of the three rigs operating in Qatar for three years.
The two companies also said they'd entered into an agreement to pursue a global strategic alliance leveraging the new support services agreement and their existing joint venture in Egypt. Under this agreement, the parties agreed to collaborate on exploring future commercial and operational opportunities.
Furthermore, Vantage announced that the Tungsten Explorer drillship returned to work for an undisclosed client offshore of Egypt through Vantage’s joint venture with ADES. The term of the drilling contract is 150 days.
Ihab Toma, Vantage’s Chief Executive Officer, commented, “We are very pleased to have entered into a new global strategic alliance agreement with ADES, leveraging our history of collaboration in Egypt and expanding it to the Qatari operations. The new transaction will strengthen our balance sheet and will provide Vantage with important financial flexibility. The sale of this business does not end our involvement in Qatar with these rigs as we will continue to support the operations of the three rigs for three years.
Toma added: “Our relationship with ADES began in 2017 when we entered into a joint venture capitalizing on Vantage’s modern fleet and deepwater drilling experience and ADES’s experience, expertise and leadership position in Egypt. The joint venture enabled ADES to gain experience in the deepwater drilling space and paved the way for Vantage to access the attractive Mediterranean Basin.
" Since that time, ADES has grown substantially, with ADES now employing more than 3,500 personnel, and owning a fleet of 55 rigs. I am delighted that the companies are taking their relationship to the next level, allowing the parties to collaborate across markets beyond Egypt to achieve further efficiencies and to leverage the parties’ operational expertise and financial strength. The success of the companies’ relationship is evidenced by Vantage’s announcement that the Tungsten Explorer has returned to work in Egypt. We are delighted to work with ADES through our joint venture and continuing to provide industry-leading service for our clients.”
Dr. Mohamed Farouk, Chief Executive Officer of ADES stated, “We are delighted to enter into this transaction with Vantage. By adding the Qatari operations to our portfolio, ADES continues to execute on our strategy of strong and disciplined growth, expanding our meaningful presence in the region while adding the highest caliber of international and national oil companies to our client base.
"Thanks to the transaction we will be able to add 3 additional premium jack-up rigs to our fleet, including all the crew and staff which further solidifies and strengthens our existing unique workforce. This transaction exemplifies the continued trust between our two companies, and as we work together in Qatar and in Egypt, I am excited about other potential opportunities for cooperation.”