The Remedy Rig Sale Agreement includes the rigs Noble Hans Deul, Noble Sam Hartley, Noble Sam Turner, Noble Houston Colbert, and Noble Lloyd Noble

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Noble Corporation announces agreement to divest remedy rigs. (Credit: C Morrison from Pixabay)

Noble Corporation (NYSE: NE, “Noble”, or the “Company”) announced that it has entered into an asset purchase agreement to sell five jackup rigs for $375 million to a newly formed subsidiary (“Buyer”) of Shelf Drilling, Ltd. (“Shelf Drilling”) whose obligations under the asset purchase agreement will be guaranteed by Shelf Drilling (the “Remedy Rig Sale Agreement”).  The sale, which is subject to approval of the UK Competition and Markets Authority (“CMA”), is intended to address the potential concerns identified by the CMA in the Phase I review of the proposed business combination between Noble and The Drilling Company of 1972 A/S (“Maersk Drilling”) announced on 10 November 2021 (the “Business Combination”).

The Remedy Rig Sale Agreement includes the rigs Noble Hans Deul, Noble Sam Hartley, Noble Sam Turner, Noble Houston Colbert, and Noble Lloyd Noble (the “Remedy Rigs”) and all related support and infrastructure.  Associated offshore and onshore staff are expected to transfer with the Remedy Rigs.  Following the sale, Noble expects to continue to perform the current drilling program for the Noble Lloyd Noble under a bareboat charter arrangement with Shelf Drilling until the second quarter of 2023 when the primary term of its current drilling contract is expected to end.  The charter arrangement would pass the economic benefit of the drilling contract to Shelf Drilling.  Drilling contracts for other Remedy Rigs are expected to be novated to the Buyer, subject to the clients’ consent.  Noble will provide certain customary transition support services to the Buyer for a limited period of time.  The Buyer is expected to finance the acquisition through equity and debt financings by the Buyer and Shelf Drilling, but the purchase is not conditioned on such financing.  The Remedy Rig Sale is expected to close promptly following closing of the Business Combination (and following receipt of CMA approval).  Additional information related to our Remedy Rig Sale will be provided in an 8-K expected to be filed by the Company on June 23, 2022.

On 9 May 2022 the CMA published its decision that there are reasonable grounds for believing that a sale to a suitable purchaser of the Remedy Rigs together with sufficient supporting infrastructure (the “Remedy Proposal”) might be accepted by the CMA to address its concerns related to lessening of competition created by the Business Combination. The duration and outcome of the CMA review process remains uncertain.  If the Buyer, Remedy Rig Sale Agreement and the Remedy Proposal are accepted by the CMA, closing of the Business Combination is expected to occur near the end of the third quarter of 2022.

In connection with the Business Combination, Noble currently expects to launch the planned exchange offer for shares of Maersk Drilling in August 2022.  In addition to the CMA approval, completion of the Business Combination remains subject to acceptance by holders of at least 80% of Maersk Drilling shares, listing of Noble shares on the NYSE and Nasdaq Copenhagen, and other customary conditions.

Source: Company Press Release