Pride to sell Latin American units for $1 billion

By OGJ editors
HOUSTON, Aug. 10 -- Houston-based drilling contractor Pride International Inc. has entered into a definitive agreement to sell its Latin America land drilling and workover and exploration & production services businesses to Brazilian private equity firm GP Investments Ltd. for $1 billion in cash.

The transaction is expected to close by the end of the third quarter, subject to customary closing conditions, including a working capital adjustment of the purchase price.

The company's Latin America land business is comprised of 73 land drilling rigs, 135 workover rigs, and two lake-drilling barges. Its E&P services business provides various services to complete, maintain, and enhance production from oil and gas wells.

Pride reported combined 2006 revenues of $823.9 million for the two business units, which operate in eight countries in Latin America.

Following the close of the transaction, Pride's remaining land-based drilling and workover operations will consist of five land drilling and workover rigs in Chad along with two other land rigs in Kazakhstan and Pakistan.

Pride said proceeds from the sale, expected to be largely tax exempt, could be used for general corporate and strategic purposes, including potential funding for the construction of two ultradeepwater drillships and for future growth opportunities.

Pride recently placed a $680 million order with Samsung Heavy Industries Co. Ltd. for a newbuild drillship with advanced and dual-activity capability for use in ultradeep water (OGJ, July 16, 2007, Newsletter). The drillship will be capable of drilling to a TVD of 40,000 ft in water as deep as 12,000 ft. It initially will be equipped for drilling in 8,000 ft of water, Pride said.