Saudi's ADC weighs bid for land rig operator Dalma

Saudi's ADC weighs bid for land rig operator Dalma
Dalma Energy owns and operates 31 land rigs throughout the Gulf, Asia and Africa.
Published: 8 September 2016 - 3:24 a.m.
By: Indrajit Sen

Saudi Arabia's Arabian Drilling Company (ADC) is considering bidding for Dalma Energy, sources told Reuters, in a deal which could value the land rig operator at more than $500mn.

US investment bank Goldman Sachs had been hired to arrange the sale of Dalma, which is owned by a consortium of investors through Saudi-based Al Qahtani Investments, two of the sources said.

ADC is interested in Dalma's assets including those in Saudi Arabia, Oman and Algeria, a third source said, adding that talks began about three or four months ago and the potential transaction is in the due diligence stage.

A deal is expected to be completed by the end of October, the third source added.

The first source said the transaction could value Dalma at more than $500mn.

Dalma Energy owns and operates 31 land rigs throughout the Gulf, Asia and Africa, according to its website, and lists a range of clients including BP, Saudi Aramco and DNO Oman.

ADC is a joint venture company 51% owned by Saudi-based Industrialization & Energy Services Co (TAQA). The rest is controlled by oilfield services provider Schlumberger.

International oil companies have slashed spending and investment in the last two years due to the slump in oil prices, the impact of which has been felt throughout the energy sector.

Gulf-based rig contractors and oilfield service companies have been forced to accept often-steep cuts to their contracts with oil explorers, although activity has remained higher than in other parts of the world as Gulf producers – in particular Saudi Arabia – maintain production levels to keep market share.

Dalma was ranked the third-largest owner of land rigs in the Middle East and North Africa region, according to a statement published by one of its bank lenders when announcing a $313mn loan for the company in 2015.

Click here to add your comment

Please add your comment below
Name
Country
Email
Your email address will not be published
Captcha