TWO of the world’s biggest drilling fleet owners/operators active in Australasian waters are combining their interests in an all-stock buy-out/merger that values the resulting company at US$17 billion.
Swiss-based Transocean and Bermuda-registered Valaris last week signed a definitive agreement under which the former will acquire the latter, for a 53%-47% combination.
The companies state the merger creates an industry leader with a diversified offshore fleet of 73 rigs, including 33 ultra-deepwater drillships, nine semisubmersibles and 31 modern jackups, to meet emerging growth opportunities.
It expands reach and customer access in world’s most attractive offshore basins, unlocks more than $200 million in identified cost synergies, in addition to Transocean’s ongoing cost savings initiative; increases cash flow, accelerates deleveraging and strengthens financial flexibility; and improves trading liquidity and capital markets profile, including an expanded investor base and opportunities for additional equity index inclusion.
Keelan Adamson, Transocean president and chief executive, said the combination was well-timed to capitalise on an emerging, multi-year offshore drilling upcycle: “Investors and our global customers will benefit from our expanded fleet of best-in-class, high-specification rigs. We have identified more than $200 million in cost synergies that will complement our ongoing efforts to safely lower costs.
Valaris chief executive Anton Dibowitz said, “By combining with Transocean, we will create a new industry leader for the benefit of our shareholders, customers and employees. We look forward to complementing Transocean’s high-specification deepwater assets with our own, while returning world class jackup expertise to Transocean’s business, creating a combined company that is capable of operating any rig at any water depth in any offshore environment around the world.”
According to the companies’ respective fleet disposition lists Transocean’s harsh environment semi-submersibles Transocean Endurance and Transocean Equinox are both under contract in Australian waters, to Woodside on the NW Shelf and ConocoPhillips in the Otway Basin.
Jack-up Valaris 107 is working in the Gippsland Basin for ExxonMobil (Esso Australia).
Separately, Norway’s DOF has won a contract extension for its platform supply vessel (PSV) Skandi Kvitsøy with “an unnamed international oil company”, believed to be Esso Australia.
The client hired the PSV in the first quarter of 2024 on a two-year deal in Australian waters (Bass Strait) and has now extended the vessel’s stay for six months.
The contract is now firm until September 2026, with further options until the first quarter of 2028.