The drilling rigs are 1,000 hp triples with a depth capacity of up to 4,000mt. This agreement is subject to closing conditions, including the transfer of drilling service contracts with the national oil company with a remaining term of two years.
In order to facilitate completion of the Libyan acquisition, the company’s management has agreed to terms on an acquisition loan facility for up to $10m. This facility will be subordinated to the company’s senior bank loan facility, bear interest at 10% per annum and mature in 12 months, subject to extension at the company’s option.
The company expects the Libyan acquisition will close in April 2010 and anticipates financing will be provided by the acquisition loan facility as well as incremental senior bank facility capacity.
John King, president of BlackWatch, said: “This marks the next step in BlackWatch’s corporate strategy to expand our geographic reach outside of North America. We are excited to be able to execute on this unique opportunity in the MENA region, which positions us for further growth with all our service lines in both Libya as well as other target markets in MENA. This is a unique opportunity for BlackWatch to initiate our business in the region and to leverage key relationships from our past.”
BlackWatch has also executed a binding memorandum of understanding with the vendor of the Libyan assets to provide BlackWatch with an option to purchase up to three additional drilling rigs located in the MENA region. The option will allow BlackWatch to purchase one, two or all three of the rigs for an aggregate purchase price of $22m for a period of six months.
