Abbot Group to Acquire Prosafe Drilling Services AS
Abbot Group plc, the offshore platform drilling contractor in the UK sector of the North Sea and one of the largest international land drilling operators outside the Americas, is to acquire Prosafe Drilling Services AS and its subsidiaries, a Norwegian North Sea drilling contractor, for a consideration of £75.4 million.
In addition to being earnings enhancing in the first year of ownership, the Proposed Acquisition provides Abbot with:
:: an entry into the Norwegian sector of the North Sea allowing Abbot to offer services across the North Sea to major oil company clients;
:: 30% of the fixed platform drilling operations on the Norwegian continental shelf and production drilling contracts with ExxonMobil, Norsk Hydro and Statoil;
:: a presence in Norway providing an opportunity to work more closely with major Norwegian oil companies both in Norway and internationally; andownership of the only light modular rig operating in the North Sea.
Abbot also announces a Placing of approximately 8.8 million new ordinary shares in Abbot at a price of 230 pence per ordinary share to raise approximately £20 million (before expenses). The Placing, which is being launched today, is underwritten and is not conditional upon the Proposed Acquisition.
On completion of the Proposed Acquisition, Prosafe Drilling will form part of Abbot's KCA DEUTAG division and trade under the name KCA DEUTAG Drilling Services Norge AS.
JPMorgan Cazenove Limited is acting as sole financial adviser to Abbot. JPMorgan Cazenove is acting as Sole Bookrunner and JPMorgan Cazenove and Arden Partners Limited are acting as Joint Lead Managers in respect of the Placing.
Commenting on the acquisition, Abbot Chairman, Alasdair Locke said: "This acquisition forms part of our strategy to become the leading contractor in our chosen markets, thereby enabling us to provide a complete portfolio of platform drilling and engineering services to the world's major oil companies. It also enhances our position in the North Sea where we are now the largest offshore platform drilling contractor. Entry into the Norwegian market is a natural extension of our UK business and takes us into an area which operates under a pro-active regime of oil and gas exploration and production, and a more stable fiscal climate.
"In addition, as our existing major oil company clients increasingly consider the UK and Norwegian continental shelves to be a common market place, I believe that we shall benefit from our ability to provide these clients with platform drilling services across both sectors of the North Sea, as well as gaining the opportunity of working more closely with the major Norwegian oil companies."
Brian Taylor, KCA DEUTAG director, added: "This is an excellent opportunity for KCA DEUTAG to enter the Norwegian market. With nine platforms, It gives us significant critical mass from the outset and complements our current operations in the UK sector of the North Sea for ExxonMobil, BP, Total, Britannia, CNR, Venture, Nexen and DNO.
"Prosafe Drilling Services has significant experience in Norwegian platform modifications and its Under-balanced Drilling Group and Drilling Equipment Rentals Group complete what we believe to be a very attractive addition to the KCA DEUTAG range of services. I am pleased that Roy Hallas will continue in the post of President of Prosafe Drilling for a six month handover period and that we are able to add a further 870 highly competent people to our existing workforce."
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