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Thursday, July 18, 2024

Esgian Week 24 Report: Noble and Diamond Offshore Announce Merger Plans

Maritime Activity Reports, Inc.

June 16, 2024

© Lucasz Z / Adobe Stock

© Lucasz Z / Adobe Stock

Esgian provides an update on Noble and Diamond Offshore’s announcement of merger plans in its Week 24 Rig Analytics Market Roundup.

Report Summary

Contracts

ADES has completed the signing of a drilling contract for a jackup with Suez Oil Company (SUCO) in Egypt.

Mergers & Acquisitions

Noble Corporation and Diamond Offshore Drilling have entered into a definitive merger agreement under which Noble will acquire Diamond in a stock plus cash transaction. As part of the transaction, Diamond shareholders will receive 0.2316 shares of Noble, plus cash consideration of $5.65 per share for each share of Diamond stock, representing an 11.4% premium to closing stock prices on 7 June 2024. Upon closing, Diamond shareholders will own approximately 14.5% of Noble's outstanding shares.

Noble intends to fund the cash portion of the transaction through new debt financing, which it has secured through a $600 million committed bridge financing facility. At closing, the Noble board of directors will be expanded to include one member from the Diamond board. The transaction has been unanimously approved by the board of directors of each company. Subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals and the approval of Diamond shareholders, it is expected to close by the first quarter of 2025.

Giving effect to the acquisition, Noble will own and operate a fleet of 41 rigs including 28 floaters and 13 jackups. Additionally, the backlog for the combined company would be approximately $6.5 billion as of Monday 10 June 2024, with a wide diversity of customers and regions of operation. Noble's President and Chief Executive Officer, Robert Eifler, said, “Our position will be strengthened with the addition of four 7th generation drillships and one of the most high-spec harsh environment semisubmersible rigs in the world.

Additionally, Diamond's five conventional deepwater and midwater rigs have averaged above 85% utilisation over the last 3 years and currently have strong forward contract coverage.” According to Noble, on a combined basis, Noble's 14 working (15 total) dual BOP 7th generation drillships will comprise the leading tier one drillship fleet in the industry. Additionally, the Ocean GreatWhite semisub will provide Noble with a high-spec floater capable of operating in harsh environments, while the remaining five semisubmersibles are expected to contribute meaningful contracted cash flow. The combination creates strong commercial opportunities with complementary customer bases around the world and across rig types. Diamond has $2.1 billion of backlog.

Drilling Activity and Discoveries

TotalEnergies and its partners Wintershall Dea and Pan American have started drilling at the Fenix field offshore Argentina.

Woodside has achieved first oil from the Sangomar field offshore Senegal, the first offshore oil project in the country.

Eni has started production from the Tecoalli platform, the company’s third platform in its Area 1 development project offshore Mexico.

Following the beginning of drilling operations on the LLOG-operated Who Dat East well in the U.S. Gulf of Mexico in April 2024, intermediate logging of the exploration/appraisal well confirms high quality, hydrocarbon-bearing sands in upper target sections, with a number of deeper targets still to be drilled.

Empyrean Energy has failed to drill an exploration well in Block 29/11 offshore China within the designated deadline and has now applied to CNOOC for an extension.

The Toppand East (Øst) well in the North Sea off Norway - drilled by Wellesley, Equinor, and Petoro - has proved to be dry.

Malaysia's Petronas Carigali is set to begin drilling an appraisal well in Block SK306, utilising Velesto's 375-ft jackup Naga 6.

Demand

The Australian offshore energy regulator, NOPSEMA, has accepted EOG Resources' environment plan for the drilling of the Beehive-1 exploration well in the Joseph Bonaparte Gulf, Western Australia.

Ahead of next month’s general election in the UK, the Labour Party has released its election manifesto, reaffirming its plans to raise taxes on oil and gas producers and remove investment allowances.

Mobilisation/Rig Moves

Dolphin Drilling’s 1,500-ft semisub Borgland Dolphin has arrived in Las Palmas, Canary Islands, where it will undergo reactivation and special periodic survey (SPS) ahead of a new contract in the UK North Sea scheduled for 2025.

COSL-owned jackup COSLSeeker has reached Ras Al Khair anchorage in Saudi Arabia. On 3 April 2024, China Oilfield Services Limited (COSL) announced the suspension of four of its jackups for a period of up to 12 months.

The Northern Offshore-owned 375-ft jackup Energy Emerger will recommence operations with Oman Oil Company (OQ) in June 2024.

The 2011-built 300-ft jackup Sahar 1 has been moved to Bandar Abbas port in Iran to undergo structural reconstruction and major equipment repairs.

Ocean Oilfield-owned 150-ft jackup B152 is underway to Dubai Drydocks in the UAE.

Rig Sales

Dolphin Drilling has sold its 5,500-ft semisubmersible drilling rig Dolphin Leader for recycling, which is in line with its ongoing efforts to optimise its fleet and enhance operational efficiency.

Other News

The New Zealand Government plans to reverse the oil and gas exploration ban imposed by the previous administration in 2018 to address energy security challenges from 'rapidly' declining natural gas reserves.

Following offered awards for two blocks/part blocks in Tranche 2 of the UK’s 33rd Offshore Licencing Round to Hibiscus Petroleum’s indirect wholly-owned subsidiary, Anasuria Hibiscus UK Limited (AHUK), the licence agreement has now been executed.

Offshore drilling contractor Vantage Drilling is currently exploring a possible listing of its shares on Euronext Growth Oslo, a multilateral trading facility operated by Euronext.

Deltic Energy has failed to secure a funding solution for the Shell-operated Licence P2252 and the Pensacola appraisal well in the UK North Sea and is withdrawing from the licence.

While Deltic Energy has failed to secure a farm-in partner for the Shell-operated Licence P2252, which contains the Pensacola discovery, the company is in the process of bringing the farm-out related to its 100% working interest in the Syros prospect to a close.

Thailand's PTTEP has agreed to acquire a 10% interest in the Ghasha concession in the UAE from Germany's Wintershall DEA.

The government of Zanzibar, a semi-autonomous region of Tanzania, has extended the deadline for bid submissions for the Zanzibar 1st Licensing Round by three months to 16 December 2024.

Beach Energy has pulled the plug on the previously planned development of its Trefoil, Bass, White Ibis, and Yolla West discoveries in the Bass Basin, offshore Australia.

PETRA Energy has been awarded a 10-year Production Sharing Contract (PSC) for the Banang Late Life Asset.

Orcadian Energy has entered into a secured long-term loan agreement with an unnamed industry partner for a loan of up to £1,150,000 for a period of two years.

Dolphin Drilling has informed that the arrest order related to its 6,000-ft semisub Blackford Dolphin in Nigeria has been lifted.

TotalEnergies has agreed to sell its Brunei subsidiary, TotalEnergies EP (Brunei) B.V, to Hibiscus Petroleum for $259 million.