Weatherford International’s subsidiary has entered into an agreement with ADES International Holding to sell Weatherford's land drilling rig operations in Algeria, Kuwait and Saudi Arabia.
Image: ADES will pay a price of $287.5m for the acquisition. Photo by Zbynek Burival on Unsplash.
The transaction also includes the sale of two idle land rigs in Iraq.
ADES will pay a price of $287.5m for the acquisition, which includes 31 land drilling rigs and related drilling contracts, as well as approximately 2,300 employees and contract personnel.
Expected to be carried out in a series of closings, the transaction is subject to regulatory approvals, consents and other customary closing conditions.
A significant part of the transaction is expected to be completed in the second half of 2018.
Following the completion of the transaction, Weatherford intends to use the sale proceeds to trim its debt.
Weatherford president and chief executive officer Mark A. McCollum said: “ADES is acquiring an efficient fleet of land drilling rigs and a dedicated workforce with more than 60 years of experience in delivering drilling efficiency, operational excellence, and first-class safety.
“It was very important to us to find a buyer who will continue to provide the same level of service quality, safety and dedication to customers in this region.”
The latest sale is second in a series of previously planned divestitures announced by Weatherford, as part of the company’s efforts to refocus on portfolio on the businesses most closely aligned with its long-term strategy and to reduce its debt.
In the coming quarters, Weatherford plans to sell its remaining land drilling rigs through a series of smaller sales.
Operating in more than 90 countries, Weatherford has a network of approximately 780 locations, including manufacturing, service, research and development, and training facilities.
ADES chief executive officer Mohamed Farouk said: “We are truly delighted to have signed this agreement with Weatherford, where its reputation as one of the world’s largest oilfield service companies and its deep-rooted knowledge and experienced professionals in over 90 countries guarantees that this substantial asset and personnel addition will be a net positive for ADES.”