Borr Drilling to buy Transocean's jack-up rig fleet for $1.35bn

Borr Drilling will acquire 10 jack-up rigs currently in operation by Transocean and their remaining contract value, and five newbuildings under construction at Keppel FELs in Singapore, and the remaining progress payments.

Keppel has signed a Heads of Agreement with Borr Drilling for the novation of the newbuilding contracts. The rigs were originally ordered in 2013 by Transocean at a price of $219m a piece which has been reduced to $216m each. Transocean made a 20% down payment on the orginal $1.1bn worth in contracts. Borr drilling will also make a $275m down payment.

Originally due for delivery in 2016 and 2017, delivery had been deffered by Transocean till 2020. Under the deal with Borr Drilling the first three rigs will now be delivered in 2017 and 2018, with the remaining two in 2020. “This will enable Keppel to improve cashflow and minimise risks of the projects,” Keppel said.

The move by Borr Drilling is its second to pick-up offshore drilling assets at low prices in the downturn having previously acquired two rigs from Hercules Offshore in January.

To help fund the Transocean jack-up rig fleet acquisition Borr Drilling is aiming to raise $800m through an equity offering issuing 228.6m shares at $3.50 per share.

Clarksons Platou Securities, DNB Markets and Fearnley Securities have been retained as joint lead managers and bookrunners for the offering.

Borr Drilling was founded by former John Fredriksen and Seadrill senior executives Tor Olav Troim and Fredrik Halvorsen, both directors of the firm.

The Transocean transaction is expected to complete at the end of May.