Shelf Drilling announced today that it has entered into an agreement to acquire the Maersk Completer jackup rig from Maersk Drilling for $38 million. The 2007-delivered Baker Marine Class 375 jackup has been cold stacked in Singapore since late-2017 after working for Brunei Shell for several years.
Shelf said that the "contemplated acquisition of this premium high-spec jackup rig is in anticipation of securing a long-term contract in the near-term.“
The transaction is subject to customary closing conditions and expected to be delivered in January 2020.
Good deal for Shelf, but the transaction supports continued pressure on jackup rig values
Just prior to the transaction, Bassoe Analytics valued the Maersk Completer at $44–53 million, slightly above the level in the transaction.
Shelf will likely have to spend some money on reactivation and class renewal, but the deal looks good. If you consider the increasing jackup demand and dayrate trend we've seen lately, Shelf should end up with a comparatively cheap asset to deploy in a stronger market.
With jackup values already depressed, we don't expect a major repricing of assets as a result of the transaction. We do see continued support for lower values which is a theme in-line with our commentary on offshore rig values from October when we reduced asset values for nearly all rig segments.
We stated that, "while the fundamentals in the jackup market are outperforming deepwater, downside pressure to values remains. And with the availability of a number of distressed assets including those being sold by creditors of Oro Negro, Aban Offshore, and Dynamic Drilling, as well as a newbuild rigs still at shipyards in China and Singapore, market clearing levels for jackups are unlikely to gain significant momentum in the near-term.“
That's what we're seeing now, and the Shelf-Maersk transaction will likely provide more confidence to the buy-side for jackups which are in negotiation or auction stages.
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Data: Bassoe Analytics, Image attribution: main image by Maersk Drilling