In a observe despatched to Rigzone by Wooden Mackenzie not too long ago, the corporate’s Principal Analyst of Upstream Provide Chain, Leslie Cook dinner, stated Wooden Mackenzie has been predicting offshore rig market consolidation for a while.
“With little urge for food from house owners so as to add new rigs as rig demand is flattening out, we believed development can be inorganic,” Cook dinner stated within the observe.
“It due to this fact comes as little shock that the primary main deal within the upstream service sector has been introduced. Noble has grabbed first mover benefit, and solidified is standing within the high two offshore rig contractors,” Cook dinner added.
- Advertisement -
In keeping with a chart included within the observe, which highlighted the highest 5 floating rig contractors by rig fleet dimension and composition, Transocean is in high spot with nicely over 35 rigs, whereas the post-acquisition Noble Company is in second with slightly below 30.
The pre-acquisition Noble is in third, neck and neck with Valaris, with over 15 rigs every, whereas Seadrill and Diamond spherical out the highest 5, the chart confirmed.
“With this [Noble Corp-Diamond Offshore Driiling] deal, greater than 60 % of whole floater backlog is with 4 drilling contractors,” Cook dinner stated within the observe.
“Whereas we consider this can have little impression on day charges within the shorter time period, we do consider that the consolidation of the market will afford rig contractors extra management within the medium and long run,” Cook dinner added.
“With day charges presently reaching $500,000 per day, this will likely be an ongoing concern for operators adhering to capital self-discipline and planning for long-term drilling applications,” Cook dinner went on to state.
Outlining different notable highlights from the Noble-Diamond deal within the observe, Wooden Mackenzie stated it positions Noble in probably the most commercially advantageous markets, leverages economies of scale, offers a great cultural match, and diversifies the corporate’s portfolio with out dilution of marketability of belongings.
Wooden Mackenzie additionally identified within the observe that it “broadens consumer footprint, improves entry to UK and Australian markets, and strengthens Noble’s aggressive place within the profitable U.S. Gulf of Mexico market”.
“If anticipated synergies and prices are realized, it can enhance efficient utilization and make Noble’s fleet extra aggressive,” Wooden Mackenzie added within the observe.
The timing of the Noble Company – Diamond Offshore Drilling deal probably displays bullishness for Noble about offshore exercise ranges globally, Mark Chapman, a Principal Analyst for oilfield providers at Enverus Intelligence Analysis, informed Rigzone not too long ago.
In an announcement posted on its web site saying its cope with Diamond, Noble highlighted that, following the closing of its transaction, it can “personal and function a fleet of 41 rigs together with 28 floaters and 13 jackups”.
“Moreover, backlog for the mixed firm can be roughly $6.5 billion as of at this time, with a large range of shoppers and areas of operation,” it added.
“With this expanded fleet and contracted money circulate visibility, Noble will stay dedicated to maximizing worth for purchasers, staff and shareholders by delivering secure and environment friendly operational outcomes and sustaining a disciplined capital allocation method that prioritizes returning the numerous majority of free money circulate to shareholders,” it continued.
The transaction is topic to the satisfaction of customary closing circumstances, together with receipt of required regulatory approvals and the approval of Diamond shareholders, in line with the assertion, which revealed that the transaction is anticipated to shut by the primary quarter of 2025.
The transaction has been unanimously accredited by the board of administrators of every firm, the assertion famous.
Wooden Mackenzie describes itself as the worldwide perception enterprise for renewables, vitality, and pure assets.
To contact the creator, electronic mail andreas.exarheas@rigzone.com
