ADES Holding Acquires Two Jack-Up Rigs for $190 Million
ADES Holding Company, a world leading international oil and gas drilling services provider based in Saudi Arabia, said that it has signed an agreement to acquire two contracted premium jack-up rigs in Southeast Asia from Vantage Drilling International Ltd. (Vantage Drilling) for $190 million, subject to working capital and other adjustments at date of closing.
The acquisition was made through the company’s directly owned subsidiary ADES International Holding Ltd. It is also a strategic move to further solidify ADES’ presence in Southeast Asia, a region poised for strong production growth against a backdrop of tight jack-up market conditions, the company said in a regulatory filing with Saudi Exchange Tadawul.
The transaction includes acquisition of the TOPAZ jack-up rig contracted in the Malaysia-Thailand Joint Development Area (JDA), marking ADES’ entry into its 10th country of operation. Additionally, ADES will acquire the shares of Rig Finance Ltd. (RFL) the owning entity of the SOEHANAH jack-up rig in Indonesia.
The addition of these two new rigs will enhance ADES’ fleet in India and SEA region, expanding its operations to seven jack-up rigs across Indonesia, Thailand, India and a new operating territory in the joint development area of two important countries to ADES.
The Contract Acquisition model is in line with ADES’ strategy to minimise risk by acquiring contracted assets, with Vantage Drilling to continue managing the rigs for the next three years. This ensures uninterrupted service for the rigs’ clients and highlights the continuation of the strong global alliance between ADES and Vantage Drilling.
The deal is expected to be closed upon fulfilment of all closing conditions which are expected to be finalised during the coming three months.
Consolidating Market Position
Aligns with The acquisition aligns with ADES’ strategy to consolidate its market position in regions with strong demand for its fleet of highly marketable offshore assets. Despite the recent wave of jack-up suspensions in Saudi Arabia and consequent uptick in supply, the offshore market continues to experience tightness with high utilisation and elevated daily rates.
This reflects the growing demand for offshore jack-up drilling in undersupplied markets like SEA, which along with new build activity reaching historical lows makes these premium assets acquired by ADES particularly valuable.
The acquisition also underscores ADES’ disciplined and non-speculative approach to growth, with an average acquisition price per rig of $95 million – consistent with ADES’ historical acquisitions of contracted rigs during periods of lower average market utilisation rates of 80%.
The company’s ability to secure assets at attractive valuations in a market where utilization rates hovering around 90% demonstrates ADES’ strategic acumen and commitment to delivering value to its shareholders.
ADES Holding CEO Dr Mohamed Farouk said that the latest acquisition marked a significant milestone for ADES as the company continued to expand our footprint in Southeast Asia, a region where they we see tremendous growth potential.
He said that by acquiring these premium jack-up rigs, we are not only enhancing our fleet but also entering a new, important market in the JDA.
“This transaction further solidifies our relationship with Vantage Drilling, building on our history of successful partnerships. The attractive valuation of this acquisition reflects our disciplined approach to capital allocation and our ability to capitalise on market opportunities. With our Contract Acquisition model minimising risk exposure, this acquisition is poised to have a direct and positive impact on our profitability, reinforcing our commitment to generating sustainable returns for our shareholders,” Farouk added.
