Friday, April 3, 2020

Top Shallow Water Driller Raises $225 Mln in Oslo IPO

June 22, 2018

Shelf Drilling, a Dubai-based contractor for shallow water rigs, raised about $225 million by issuing new shares priced at 65.35 Norwegian crowns ($8.09) per share, the company said on Friday, the latest drilling firm to list in Oslo to raise capital.

Its initial public offering comes four years after the company scrapped plans to list in London just as the oil market's downturn started.

Demand for shallow water or jack-up rigs has been steadily growing through 2017 after hitting a bottom at the end of 2016. Brent crude is trading at almost $74 a barrel, up from $27 a barrel in Jan. 2016.

Some 28.1 news million shares representing about 25 percent of Shelf Drilling's total common shares were issued at a lower end of the indicative price of $8-9, implying the market cap of about 7.3 billion crowns ($903.4 million), the company added.

In addition, the IPO's managers have over-allotted 4.2 million shares, or 15 percent of the newly issued shares.

Private equity firms - Lime Rock Partners, Castle Harlan and CHAMP - held more than 60 percent of the company's shares as of March, and after the IPO more than 50 percent of Shelf Drilling shares are expected to be in a free float.

The company said it would use the proceeds to redeem all of its preferred shares and accrued dividends, as well as to buy one drilling rig to add to its fleet of 38 jack-up rigs.

Shelf Drilling, the world's largest shallow water driller by the fleet size, competes with such companies as Ensco , Rowan, Seadrill (SDRL) and Borr Drilling.

Borr, backed by the world's largest oil service firm Schlumberger (SLB), listed on Oslo exchange last year, raising some $650 million.

Historically, jack-up rigs used to lead the offshore drilling market's recovery as shallow water projects are less capital intense and take less time to start production than projects in deeper water.

DNB Markets and Clarksons Platou Securities acted as joint bookrunner, while Arctic Securities AS and SpareBank 1 Markets AS are acting as co-managers.

Shelf Drilling shares, which were listed on Oslo over-the-counter market last year, are expected to start trading on Oslo exchange on June 25.

($1 = 8.0807 Norwegian crowns)

(Reporting by Nerijus Adomaitis Editing by Keith Weir)

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