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Transocean to sell 38 rigs to start-up firm

Transocean Ltd. has signed definitive agreements to sell 38 shallow-water drilling rigs to a new company called Shelf Drilling for $1.05 billion.

The price includes about $855 million in cash, subject to adjustments, and $195 million in seller financing in the form of preference shares issued by an affiliate of Shelf Drilling.

Shelf Drilling is sponsored equally by private equity firms Castle Harlan Inc., CHAMP Private Equity, and Lime Rock Partners.

Steven L. Newman, Transocean president and chief executive officer, said sale of the rigs is part of a strategy to focus on high-specification floating rigs and jack ups.

Shelf Drilling will start work as a private company based in Dubai at closing of the Transocean deal, scheduled for the fourth quarter this year. Its founding chief executive officer is David Mullen, a former Transocean senior vice-president who most recently was chief executive officer of Wellstream of the UK.

With the fleet acquired from Transocean, which includes 37 standard jack ups and a swamp barge, the new company will operate throughout Southeast Asia, India, West Africa, the Middle East, and the Mediterranean.

Two of the rigs are being reactivated, and five are stacked.

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