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ADES bolsters Middle East presence with US$288mln onshore rig purchase

Company is buying 31 onshore rigs from oil services giant Weatherford International

drill rig
Rigs are expected to generate revenues of US$150mln

ADES International Holding Ltd (LON:ADES) has agreed to buy 31 onshore drilling rigs located in North Africa and the Middle East from drilling services powerhouse Weatherford International.

The deal doubles ADES operational drill fleet and includes contracts, management systems and approximately 2,300 staff throughout Algeria, Kuwait and Saudi Arabia.

READ: ADES International sees oil price rally feeding through to rig activity

At present, twenty of the rigs are under contract with the rest to be used as inventory and for tenders.

Revenues from the Weatherford rigs are expected to be US$150mln a year and they will add US$750mln to ADES' order backlog.

The purchase price is US$287.5mln to be paid through cash and debt facilities.

Mohamed Farouk, chief executive, said: "We are truly delighted to have signed this agreement with Weatherford. 

Describing it as a landmark transaction, Farouk added it will significantly expand ADES total fleet and more than doubles its operational fleet.

"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.

The new assets will also reinforce the company’s position in the Saudi Arabian and Algerian markets and mark the expansion of its regional footprint into Kuwait and Southern Iraq.

ADES will have 34 onshore rigs in the Middle East/ North Africa region on completion.

Quick facts: ADES International Holding PLC

Price: 10 USD

LSE:ADES
Market: LSE
Market Cap: $430.22 m
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