ADES Signs PSA for Three Operational Offshore Jack-up Rigs in the Arabian Gulf

LONDON & DUBAI, United Arab Emirates–(BUSINESS WIRE)–ADES International Holding Ltd. (“ADES” or the “Group”) (LON: ADES), the
London-listed company providing offshore and onshore oil and gas
drilling and production services in the Middle East and Africa through
its subsidiaries, has signed a Purchase and Sale Agreement (PSA) with
Nabors Drilling International II Limited, a subsidiary of Nabors
Industries Ltd (“Nabors”) (NYSE: NBR). to acquire three operating
offshore jack-up rigs currently contracted by a major national oil
company in the Arabian Gulf for a total purchase price of US$83 million,
payable in a combination of cash and ADES shares (the “Transaction”).

The PSA also provides for the existing drilling contracts associated
with the rigs to be transferred to ADES.

Transaction Highlights

• Consideration for the Transaction will include a cash payment
  equivalent to 75% of the total Transaction value and the remaining 25%
  will be paid in the form of newly issued shares of ADES
  (“Consideration Shares”).
• The total number of Consideration Shares was calculated using the
  closing mid-market price of ADES shares on 18 December 2017, being the
  business day prior to the Transaction signing date.
• Consideration Shares issued to Nabors as part of the transaction will
  be subject to a three-month lockup period.
• In total, the acquisition is expected to add approximately US$60
  million annually to ADES’ Group revenue, while maintaining margins and
  thereby further enhancing Group earnings.
• The Transaction is expected to close in Q1 2018, subject to the
  fulfilment of the conditions precedent as agreed in the PSA, including
  the renewal of current drilling multi-year contract terms.

About the Acquired Rigs

• The three ultra-shallow drilling rigs have each been in continuous
  service for more than 10 years, making them among the most in-demand
  assets in the region.
• The rigs have recently been refurbished, with five-year inspections
  already implemented on two rigs and the third is due in 2018.
• Once completed, the Transaction will bring the number of the Group’s
  rigs under contract in the Arabian Gulf to six, further cementing
  ADES’ position as a major low-cost operator of offshore drilling rigs
  in the region.
• ADES and Nabors will collaborate to advance the integration and
  automation technology initiatives of Nabors Drilling Solutions and
  Canrig, including automating rig surface and downhole activities,
  within the offshore drilling space in the Middle East and beyond.
  Specifically, the companies will set up a high level technical,
  operational and commercial taskforce with the objective of introducing
  the Nabors value proposition within the region utilising ADES rigs.

ADES shall, in due course, invite its Shareholders to vote on a special
resolution for the issuance and allotment of shares to be issued to
Nabors in connection with this Transaction.

ADES is also finalising a separate PSA with Nabors to acquire two
stacked offshore jack-up rigs in a similar cash and shares deal which,
in line with the Company’s strategy of minimising risk, will be
contingent on the awarding of specified drilling contracts. Progress on
these negotiations will be announced in due course.

Commenting on the acquisition, Dr. Mohamed Farouk, Chief Executive
Officer of ADES International Holding, said:

“We are delighted to announce the signing of the PSA to purchase these
rigs, which once closed, will double our Arabian Gulf fleet and number
of contracted rigs. The acquisition will enhance the Group’s position in
the region’s offshore drilling fields and serves as testimony to the
confidence our clients have placed in us.

Nabors has a significant track record and strong operational experience
in the oilfield services sector and we are very pleased with their
decision to become a shareholder in the Group. We view their continued
involvement and alignment with ADES, including the provision of access
to their state of the art drilling technology, as a positive
reinforcement of their confidence in our business.

On completion, the acquisition will have an immediate substantial and
positive impact on our revenues and ADES’ cash flow-generating ability,
and is in line with our post-IPO growth strategy of scaling-up
operations in existing and target markets.”

The full announcement including legal disclaimers is available at: http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/ADES/13471768.html

Contacts

ADES International Holding
Hussein Badawy
Investor
Relations Officer
T: +2 (0)2 2527 7111
[email protected]
or
Instinctif
David
Simonson
[email protected]
+44
(0)20 7457 2020