By OGJ editors
HOUSTON, Apr. 2 -- Precision Drilling Corp. Friday agreed to buy all of GlobalSantaFe's worldwide land drilling assets in a $316.5 million cash deal.
The transaction, which is expected to be completed during the second quarter, includes 31 land rigs in the Middle East, North Africa, and South America and a fleet of specialized rig transport equipment that supports land rig operations in Kuwait and the Kuwaiti-Saudi Arabia Partitioned Neutral Zone.
GlobalSantaFe said that its land rig business has become "an increasingly smaller part" of its overall operations over the years and that the transaction will permit the Houston-based company to focus its efforts on growing its offshore market.
In a research note released Friday, Lehman Bros. Inc. analyst Angeline M. Sedita broke down the rig's locations: "[GlobalSantaFe's] land rig fleet is entirely international, comprised of 12 rigs in Kuwait, 8 rigs in Venezuela, 7 rigs in Saudi Arabia and Oman, and 4 rigs in Egypt."
Sedita added that currently, 17 of the rigs are working at rates from $5,000/day to $20,000/day. She added that GlobalSantaFe would likely use proceeds from the sale to "fund the completion of several newbuild offshore rigs currently under construction."
