Stock Photo: HASPhotos / Shutterstock.com
OSLO, Sept 11 (Reuters) – Offshore drilling contractor Seadrill is looking to buy more assets or create a larger player by merging with peers, the company’s CEO said on Wednesday.
Norwegian-born billionaire John Fredriksen lost the control of the company, once the world’s largest driller by market cap, to its creditors over two debt restructurings since 2014.
Now a much leaner and smaller company, New York-listed Seadrill itself is looking to buy distressed assets or players with “distressed balance sheets,” CEO Simon Johnson told an investor conference in Norway.
“We are not going to do anything crazy, we’ve proven our discipline,” he said. But the amount of cash the company has on its balance sheet, “which some consider inefficient, gives us both a defensive buffer and a basis for offense,” he said.
“We haven’t seen the end of consolidation in (the offshore drilling market),” Johnson added.
Debt restructurings following oil market crashes in 2014 and 2020 led to a wave of consolidation in the sector, which left fewer players with fewer rigs, with drilling rates more than doubling since 2021.
“We believe that there is room for one big consolidation, especially given that our customers are also consolidating,” Seadrill rival Transocean’s President and Chief Operating Officer Keelan Adamson told the conference.
Johnson told the conference Seadrill remained agnostic whether it comes on top in a potential merger, or is bought by others, provided the price is good.
“We are looking to add a couple of units (drilling rigs) so we grow to 20-25 units… But we will be also open to being a junior partner in an integration provided that we get the premium that reflects the quality of our assets,” he added.
Johnson declined to say whether the company was involved in any negotiations on a possible merger, when asked by Reuters.
Its top three shareholders are investment funds Bybrook Capital LLP, Canyon Capital Advisors LLC and Elliott Management Corporation, according to LSEG data.
(Reporting by Nerijus Adomaitis; Editing by Jan Harvey)
(c) Copyright Thomson Reuters 2024.
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 109,769 members that receive our newsletter.
Have a news tip? Let us know.
The Bureau of Ocean Energy Management (BOEM) has confirmed competitive interest in two offshore wind areas (WEAs) off the southeast Texas coast, following an unsolicited lease request from Hecate Energy...
W&T Offshore, an independent driller operating in the U.S. Gulf of Mexico, has asked a federal judge to block insurance companies' demands for $250 million in additional collateral for taking apart old oil infrastructure.
Europe is starting to find the limit of a decades-long boom in offshore wind. It can be seen most acutely in the places that have been quickest to build capacity. Countries like Denmark and Sweden are beginning to hit a wall as power prices and incentives drop too low to make building projects worth it. The latest example is a Danish government auction for offshore wind that failed to attract any bids.
Maritime and offshore news trusted by our 109,769 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
