Offshore drilling consolidation move by Ensco

Offshore driller Ensco will merge with Atwood Oceanics to create a USD 6.9-billion combined entity, the two companies said in a joint statement released on Tuesday.

London-based Ensco will buy Atwood via a board-approved all-stock transaction, which is expected to close in the third quarter of 2017. Cost synergies as a result of the merger are projected to reach USD 45 million next year, growing to USD 65 million for 2019 and beyond.

The newly created entity will have a fleet of 26 floating rigs, 21 which are capable of operating in ultra-deepwater environments. With 37 units, the company’s fleet of jackup rigs will be the largest in the world, according to Ensco.

“This acquisition significantly enhances our high-specification floater and jackup fleets, adding technologically advanced drillships and semisubmersibles, and refreshing our premium jackup fleet to best position ourselves for the market recovery,” Ensco CEO Carl Trowell said of the move.

His counterpart at Houston-headquartered Atwood, Rob Saltiel, called the merger an “ideal strategic fit.”