Seadrill Limited, the offshore drilling company based in Bermuda, has entered into a binding share purchase agreement with subsidiaries of ADES Arabia Holding Ltd to sell the legal entities that own and operate seven jack-ups in Saudi Arabia in a deal worth more than $600 million.

Upon completion of the jack-up sale, expected in the fourth quarter of 2022, the AOD I, AOD II, AOD III, West Callisto, West Ariel, West Cressida and West Leda will be owned by ADES, which will also employ the crews operating the rigs and will hold the drilling contracts related to the rigs.

The total consideration for the jack-up sale is $628 million in cash, subject to adjustment for working capital and other items, and reimbursement to Seadrill for any project costs spent at the time of closing in relation to the reactivation of the three stacked jack-ups, namely the West Ariel, West Cressida and West Leda.

This translates into approximately $100 million per rig on a ready-to-drill basis.

The proceeds from the sale enable Seadrill to significantly deleverage its balance sheet and to eliminate outstanding capital expenditure for the reactivation rigs.

Seadrill also reported that the West Neptune secured a six-month firm term extension, with a further six month optional period, with LLOG Exploration Offshore LLC in US Gulf of Mexico.

Total contract value for the firm-term is approximately $73 million, with an additional $78 million for the optional period.

***

Valaris Limited, the Bermudian-based offshore drilling company, has announced new contracts and contract extensions with associated contract backlog of $149 million.

Contract backlog excludes lump sum payments such as mobilisation fees and capital reimbursements.

The company secured a three-well contract with Eni Mexico S de RL de CV offshore Mexico for semi-submersible Valaris DPS-5.

The contract is expected to commence in the fourth quarter 2022 and has an estimated duration of 240 days. The operating day rate is $313,500, plus a mobilisation fee of approximately $1.2 million.

Valaris has a four-well contract extension with a duration in the region of 500 days with Shell in the UK North Sea for heavy duty harsh environment jack-up Valaris 122. The contract extension will be in direct continuation of the existing firm programme and has a contract value of over $60 million.

The company has a one-well contract with an undisclosed operator offshore Australia for heavy duty modern jack-up Valaris 107. The contract is expected to commence either late in the first quarter or early in the second quarter 2023 with an estimated duration of 60 days. The operating rate is $120,000 per day.

Valaris reported a one-well option exercised by DNO in the UK North Sea for heavy duty ultra-harsh environment jack-up Valaris 247. The one-well option has an estimated duration of 45 days and will be in direct continuation of the existing firm programme.

***

Bermudian-based SFL Corporation Ltd has agreed to acquire two new eco-design feeder container vessels in combination with long-term time charters to a leading European liner company.

The ship-owning company, one of the world’s largest, expects to take delivery of the vessels from the shipyard in Q3 and Q4 2022.

The time charters will run for a period of minimum seven years, with purchase options at the end of year six and seven, including a profit share feature.

The fixed rate charter backlog will increase by approximately $120 million, with an ebitda contribution from the vessels estimated to approximately $13 million per year.

Ole B. Hjertaker, CEO of SFL Management AS, said: “The transaction demonstrates our ability to expand our fleet and existing customer relationships through repeat transactions with swift execution.

“We find the deal attractive given the investment grade counterpart, immediate cash flow and with charter terms enabling us to quickly reduce asset exposure over the firm period.

“So far this year we have added approximately $1.4 billion to the fixed rate charter backlog.”

SFL’s fleet of vessels is comprised of container vessels, car carriers, tanker vessels, bulkers and offshore drilling rigs.