Offshore drilling companies Ensco and Rowan have completed the previously announced merger deal, creating a new company named Ensco Rowan. Ensco Rowan is now the world’s largest offshore drilling company by fleet size.
The merger completion follows the satisfaction of the transaction’s closing conditions including approval by each company’s shareholders and sanction by the UK Court of the scheme of arrangement implementing the transaction.
Under the terms of the transaction agreement, Rowan shareholders received 2.750 Ensco shares for each Rowan share they owned immediately prior to closing.
Legacy Ensco and Rowan shareholders own approximately 55% and 45%, respectively, of the outstanding shares of EnscoRowan.
Following the closing of the transaction, ordinary shares of the combined company have been consolidated through a 4:1 reverse stock split, resulting in approximately 197 million ordinary shares outstanding.
Tom Burke, EnscoRowan’s President and Chief Executive Officer, said, “The successful completion of our merger further enhances our market leadership with a fleet of high-specification floaters and jack-ups and diverse customer base. Our growing geographic presence, technologically-advanced drilling rigs and talented employees position us exceptionally well to meet increasing and evolving customer demand. I look forward to executing on the significant long-term growth opportunities we believe we can capture from our combined strengths as the offshore sector recovers.”
Carl Trowell, EnscoRowan’s Executive Chairman, stated, “The combination of Ensco and Rowan creates an industry-leading offshore driller across all water depths, establishing a stronger company capable of thriving throughout the market cycles. Our increased scale, diversification and financial strength will provide significant advantages to better serve our customers and unlock long-term value for our shareholders. We are excited to move forward together as a combined company.”
The merged company is now the world largest offshore drilling contractor by fleet size by a big margin with 82 rigs in its fleet. For comparison, drilling giant Transocean which recently bought rival Ocean Rig, prior to the acquisition said the merged fleet would have 57 rigs.
It was previously reported that the combined fleet of the Ensco and Rowan would consist of 28 floating rigs (semi-subs and drillships) and 54 jack-ups. The number includes two drillships and one jack-up rig under construction and does not include rigs which are part of Rowan’s ARO joint venture in Saudi Arabia.
Within the fleet of 28 floating rigs are 25 ultra-deepwater rigs capable of drilling in water depths of greater than 7,500 feet, with an average age of six years. According to Ensco, the combined fleet will also have the second-largest fleet of the highest-specification drillships in the industry, with 11 of these seventh generation ultra-deepwater rigs.
As for the jack-up rigs, the 54-rig jack-up fleet includes 38 units that are equipped with advanced features such as increased leg length, expanded cantilever reach and greater hoisting capacity. Among the Ensco Rowan’s jack-up fleet are seven ultra-harsh environment units and nine additional modern harsh environment rigs.
Apart from the sheer size of the fleet, the driller will have one of the most diversified footprints geographically.
Back in October 2018 when the merger plans were announced, energy intelligence firm Rystad said that the merger would create “an industry-leading drilling contractor capable of working across all water depths with a truly global footprint,” and would open the door for Ensco to enter harsh-environment Norwegian market where it had previously not had a footprint.
“This also creates the largest marketed, high-spec jack-up drilling contractor in the Gulf of Mexico. The combined company will be very well positioned to benefit from the upturn in the offshore drilling sector,” Rystad said at the time.