Transocean Ltd. plans to acquire Ocean Rig UDW Inc., boosting Transocean’s position in the ultradeepwater and harsh-environment drilling markets. Expected to close in early 2019, the transaction involves cash and stock worth an estimated $2.7 billion, including Ocean Rig’s debt.
The transaction adds nine high-specification ultradeepwater drillships, two harsh-environment semisubmersibles, and two high-specification, ultradeepwater drillships currently under construction.
With the combined company, Transocean will have a fleet of 57 floaters. The boards of each company already unanimously approved the deal. Shareholders of Transocean and Ocean Rig will own 79% and 21%, respectively, of the combined company. Shareholders and regulators have yet to approve the deal.
The two drillships under construction at Samsung Heavy Industries are expected to be delivered in third-quarter 2019 and third-quarter 2020, respectively.
Jeremy Thigpen, Transocean’s president and chief executive officer, said the transaction expands Transocean’s presence in Brazil, West Africa, and Norway. “It also enables us to reduce our cost per active rig, as we believe that we can efficiently merge the Ocean Rig operations into our existing structure with limited incremental shore-based expense,” he said.
No changes to Transocean’s board of directors, executive management team, or corporate structure are anticipated. Transocean will remain headquartered in Steinhausen, Switzerland, with operating presence in Houston, Aberdeen, and Stavanger.
In addition, Transocean announced it will retire the ultradeepwater drillship C.R. Luigs and the midwater floater Songa Delta. The rigs will be classified as held for sale and will be recycled. Both currently are stacked.
