American drilling contractor Helmerich & Payne (H&P) has agreed to acquire KCA Deutag International, a Scotland-based onshore and offshore drilling, engineering, and technology company, in an all-cash deal worth $1.97bn.
Headquartered in Aberdeen, KCA Deutag operates in both onshore and offshore drilling, engineering, and technology sectors.
KCA Deutag’s global operations extend across 26 countries, with a workforce of over 11,000. As per its website, the company owns and operates 167 drilling rigs in regions including the Middle East, the Caspian Sea, Europe, Africa, Canada, and Latin America.
The Scottish firm also focuses on advanced automation, directional drilling, and survey management technologies, as well as developing decarbonisation technologies through its Kenera business.
KCA Deutag CEO Joseph Elkhoury said: “This announcement represents a significant milestone in the strategic transformation journey of KCA Deutag and delivers benefits to all stakeholders: our employees, customers, shareholders and the communities where we live and work.”
“We look forward to joining H&P, combining the strengths of our people together with our geographical footprint, to create an organisation with an unrivalled global network, service capability and technology offering.”
Helmerich & Payne, which is listed on the New York Stock Exchange (NYSE), specialises in designing, fabricating, and operating high-performance drilling rigs globally.
Upon completion of the acquisition, Helmerich & Payne will enhance its presence in the US and Middle East, which are considered to be two major oil and gas producing regions.
The acquisition is expected to accelerate Helmerich & Payne’s international growth strategy by expanding its footprint in the Middle East, a region that accounted for approximately 70% of KCA Deutag’s EBITDA in 2023.
The deal is also expected to create a combined entity with a strong position in onshore drilling and a diversified geographical presence.
The transaction will integrate KCA Deutag’s asset-light offshore services business and Kenera’s manufacturing and engineering operations. This will enhance Helmerich & Payne’s capabilities in Europe and the Middle East.
The acquisition includes 29 offshore platform rigs managed by KCA Deutag and three Kenera facilities serving the oilfield service industry.
Helmerich & Payne president and CEO John Lindsay said: “This is a historic and transformative transaction for the Company, and we are excited about what this means for H&P’s future, as it accelerates our international expansion particularly in the Middle East and enhances the Company’s global leadership in onshore drilling solutions.
“KCA Deutag’s assets and operations will add resilient revenues, providing greater earnings visibility and cash flow generation. As a result, we expect to generate sizeable incremental cash flows and are confident this transaction will deliver near- and long-term growth and value creation for H&P shareholders.”
The deal is anticipated to close before the end of 2024, pending customary closing conditions and regulatory approvals.
KCA Deutag recently completed the final stage of its acquisition of Saipem Onshore Drilling, transferring rigs in Argentina, Kazakhstan, and Romania, among other regions.
