Ensco to acquire Atwood Oceanics, bolster rig fleet to 63

Ensco PLC has agreed to buy Atwood Oceanics Inc. in an all-stock deal that will create a combined company valued at $6.9 billion based on the closing price of each company’s shares on May 26.

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Ensco PLC has agreed to buy Atwood Oceanics Inc. in an all-stock deal that will create a combined company valued at $6.9 billion based on the closing price of each company’s shares on May 26.

The deal will provide Ensco with six ultradeepwater floaters, including four drillships, and five high-specification jack ups. The combined company will have a fleet of 63 rigs, including ultradeepwater drillships, deep and midwater semisubmersibles, and shallow-water jack ups, with a customer base of 27 national oil companies, supermajors, and independents.

The combined firm’s fleet of 26 floating rigs will include 21 ultradeepwater drilling rigs, with an average age of 5 years, capable of drilling in 7,500 ft of water or greater. The jack up fleet will consist of 37 rigs, including 27 premium units.

The two firms’ current regions of operation include the Gulf of Mexico, Brazil, West Africa, Middle East, North Sea, Mediterranean, and Asia Pacific.

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The move will not affect Ensco’s executive management structure, with Carl Trowell and Paul Rowsey continuing as chief executive officer and chairman, respectively. The combined firm’s board will include Carl Trowell plus two members from Atwood’s current board. Ensco will continue to be based in the UK with senior executive officers in London and Houston.

The combination is expected to provide expense savings of $45 million in 2018 and $65 million/year in 2019 and beyond due to the consolidation of offices as well as the standardization of systems, policies, and procedures across the organization. The combined company will have $3.7 billion in revenue backlog.

Upon close of the deal, expected as early as the third quarter, Ensco and Atwood shareholders will own 69% and 31%, respectively, of the outstanding shares of Ensco.

Contact Matt Zborowski at matthewz@ogjonline.com.

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