Noble selling five jackup rigs to Shelf Drilling to secure UK approval for Maersk Drilling merger

Offshore driller Noble Corporation has sealed a deal to sell five jackup rigs to a newly formed subsidiary of Dubai-based Shelf Drilling to address the potential concerns identified by the UK Competition and Markets Authority (CMA) in its review of the planned merger with Maersk Drilling.

The UK competition watchdog said in April it had found that the merger of the two trilling giants could increase operating costs for oil and gas producers in the North Sea. As part of the remedy, the NYSE-listed Noble will offload the Noble Hans Deul, Noble Sam Hartley, Noble Sam Turner, Noble Houston Colbert, and Noble Lloyd Noble for $375m. The Oslo-listed Shelf Drilling said it would finance the rigs with debt financing, available cash and a $130m to $150m private placement.

Relevant offshore and onshore staff are expected to transfer with the rigs. Following the acquisition, Noble is expected to continue to perform the current drilling program for the Noble Lloyd Noble under a bareboat charter arrangement with Shelf Drilling until the second quarter of 2023 and pass the economic benefit of its drilling contract to Shelf Drilling. The remaining drilling contracts for the other rigs are expected to be novated to Shelf Drilling, with Noble to continue to provide certain customary transition support services for a limited time.

The sale, which is subject to the approval of the CMA, is expected to close in September 2022. Shelf Drilling has paid a deposit of $37.5m, which will not be repayable in case it fails to complete the acquisition.

Noble is expected to launch the planned exchange offer for shares of Maersk Drilling in August. In addition to the CMA approval, completion of the merger remains subject to acceptance by holders of at least 80% of Maersk Drilling shares, listing of Noble shares on the NYSE and Nasdaq Copenhagen, and other customary conditions.