February 15, 2008
Transocean sells three jack-up rigs to Hercules Offshore
Transocean Inc. (NYSE:RIG) is selling three of its U.S. Gulf jack-ups to Hercules Offshore, Inc. (Nasdaq:HERO) to enable it to exit the shallow-water area of the U.S. Gulf. Hercules is buying the rigs to expand its international presence.
Transocean has entered into a definitive agreement to sell the GSF Adriatic III, GSF High Island I and GSF High Island VIII and related equipment to Hercules for $320 million. The sales are expected to be consummated at the conclusion of each rig's current contract commitment and are subject to customary closing conditions, including regulatory approvals. The agreement has been approved by the Boards of Directors of both companies.
"This agreement is consistent with our practice of selling non-strategic assets at favorable prices," said Transocean Inc. CEO Bob Long. "These rig sales will take us out of the shallow-water area of the U.S. Gulf of Mexico and will allow us to redeploy our people to more strategic assets."
Built in 1982, the GSF Adriatic III is a Marathon LeTourneau 116C design jack-up with a water depth capability of 350 feet. Built in 1979 and 1981, respectively, the GSF High Island I and the GSF High Island VIII are Marathon LeTourneau 82-SDC design jack-ups with a water depth capability of up to 250 feet.
All three rigs are currently located in the U.S. Gulf of Mexico. However, Hercules says that it is currently negotiating long-term international contracts for the High Island I and High Island VIII, and will begin marketing the third rig, Adriatic III, in a number of international markets in the near future.
Randy Stilley, Chief Executive Officer and President of Hercules Offshore, stated, "The addition of these three rigs improves the overall quality and flexibility of Hercules Offshore's jackup fleet, strengthening our ability to serve our customers and providing the capability for the Company to further diversify geographically. We look forward to expanding our international presence and increasing our contract backlog and revenue visibility. I expect the transaction to be accretive to earnings and cash flow per share and to create value for Hercules Offshore shareholders."