Borr Drilling to Buy Transocean’s Jack-Up Fleet for $1.4 Billion

File photo. Credit: Transocean
File photo. Credit: Transocean

Newly established Borr Drilling has announced plans to scoop up Transocean’s entire fleet of high specification jack-up rigs in a deal worth nearly $1.4 billion.

Borr Drilling revealed Monday that it has signed a Letter of Intent with Transocean for the acuisition of 15 jack-ups, comprising ten rigs in Transocean’s fleet and 5 newbuilds under construction at Keppel FELS in Singapore. The company said total consideration for the transaction is expected to be approximately USD $1.35 billion and includes the remaining contract backlog and remaining yard installments to Keppel for the five newbuilds.

Borr Drilling was established late last year by former executives of Seadrill, led by Tor Olav Troeim, a former long-time adviser to billionaire John Fredriksen. Troeim split from Fredriksen in 2014.

Borr said it has already paid a deposit to Transocean for the rigs, adding that it has secured $800 million in financing through a private placement of shares. The completion of the transaction is expected to take place before the end of May 2017.

Borr’s fleet currently consists of two jack-ups formerly owned by Hercules Offshore. The company was formed in December 2016 with the ambition to acquire and operate modern drilling assets at discount as the offshore drilling industry continues to experience overcapacity and historically low activity due to falling oil prices since 2014.

“We are building a platform with modern equipment, an experienced management team and a robust capital structure in order to be able to capitalise on the opportunities that will arise in this market environment,” Borr said in a statement last December upon listing its shares to the Norwegian OTC market.

Borr’s management consists of Rune Magnus Lundetræ and Svend Anton Maier, both of whom are former Seadrill executives, serving as CEO and COO, respectively.

Following the transaction, Transocean’s fleet will consist of 56 mobile offshore drilling units, consisting of 30 ultra-deepwater floaters, seven harsh-environment floaters, three deepwater floaters, and six midwater floaters. The company also has four ultra-deepwater drillships under construction or under contract to be constructed.

Following the transaction, Transocean’s fleet will consist of 56 mobile offshore drilling units, consisting of 30 ultra-deepwater floaters, seven harsh-environment floaters, three deepwater floaters, and six midwater floaters. The company also has four ultra-deepwater drillships under construction or under contract to be constructed.