Houston’s Northern Offshore to Be Acquired By Chinese Company

Energy Endeavor northern offshore rig jackup
Northern Offshore harsh environment jack-up rig, Energy Endeavour. Photo: Northern Offshore

 

Houston-headquartered offshore drilling company Northern Offshore Ltd. (NOF) says it has reached a deal for the all-cash sale of the company to the Chinese company Shandong Offshore Company Limited.

Under the deal, the Shandong Offshore will acquire all shares of NOF for the purchase price of NOK 7.59 per share, for a total value of approximately NOK 1.3 billion (US $165 million).

The acquisition will be implemented under Bermuda law, where NOF is based.

The acquisition is subject to approval of NOF shareholders at a special general meeting expected to be held on or about July 15, 2015. The terms of the sale have been unanimously recommended by the board of directors of NOF as the deal “represents an attractive valuation for NOF shareholders today” and “an opportunity for NOF shareholders to realize their entire investment in NOF, in cash at a premium without the risks associated with public market sentiment and the current economic environment,” NOF said in a statement.

If finalized, the acquisition is expected to become effective during the first half of August 2015.

NOF says that the consideration will be financed from the Shandong Offshore’s existing cash resources.

Shandon Offshore also owns Blue Ocean Drilling, which is also headquartered in Houston.

“The acquisition of Northern Offshore Ltd. is a positive step in our vision of building a high-performing offshore drilling organization to meet the current and future needs of the Global E&P sector,” said Sun Yuanhui, Chairman of Blue Ocean Drilling. “By retaining the NOF leadership team, when combined with our Blue Ocean Drilling leadership, we will have assembled a highly skilled and experienced team to direct and execute on our strategies as the new Northern Offshore Ltd. going forward.”

Commenting on the Acquisition, Gary W. Casswell, President and CEO of NOF said:

“This transaction represents a major milestone in Northern Offshore’s previously stated strategy to transform our company to a niche, premium jackup drilling contractor with new, state of the art assets. With the exception of the Norwegian continental shelf, NOF will be able to operate in all major petroleum resource regions around the world. Combining the four (4) under construction high spec jackups of Blue Ocean Drilling with Northern Offshore’s two (2) under construction state of the art jackups with deliveries in 2016 thru early 2018, we will realize organizational synergies and have the opportunity to build additional critical mass in our current operations in the North Sea and Asia Pacific as well as position us to pursue new clients in new areas.”

Northern Offshore Ltd. was created in July 2000 and reorganized into its current form on June 2, 2005 when a new Board of Directors was elected. The company was listed on the Oslo Stock Exchange in September 2007 and trades under the symbol “NOF”.

The company currently owns four drilling units operating in South Asia, the North Sea, West Africa and one floating production unit operating in the Northern U.K. North Sea. In addition, the company has two high spec LeTourneau Super 116E jackups under construction.