Helmerich & Payne, Inc. (HP), a provider of rig technologies and drilling solutions, announced Wednesday a strategic alliance with The Abu Dhabi National Oil Co. or ADNOC and its unit ADNOC Drilling Co.
Under the alliance, ADNOC Drilling acquire eight FlexRig land rigs from H&P for $86.5 million. Following the deal, H&P will make a $100 million cornerstone investment into ADNOC Drilling's recently announced Initial Public Offering or IPO.
On September 6, ADNOC announced its intention to float a 7.5 percent minority stake of ADNOC Drilling on the Abu Dhabi Securities Exchange through an IPO.
H&P's cornerstone investment will be at the IPO price and is subject to a three-year lock-up. H&P said it expects to benefit from ADNOC Drilling's commitment to a robust dividend policy.
The rigs are expected to be delivered and commissioned in stages over a twelve-month period subject to acceptance upon successful completion of a final inspection on customary terms and conditions.
The company noted that the strategic alliance and rig acquisition will support ADNOC's target of reaching 5 million barrels per day or mbpd production capacity and gas self-sufficiency for the UAE by 2030, along with plans to unlock its unconventional oil and gas resources.
H&P noted that the company and ADNOC will remain committed, long-term shareholders in ADNOC Drilling.
In the deal, Moelis & Company acted as exclusive financial advisor to ADNOC. Morgan Stanley & Co. LLC acted as exclusive financial advisor to H&P.
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