Shelf Drilling sells jack-up rig to ADNOC Drilling

Offshore drilling firm Shelf Drilling has agreed to sell a jack-up drilling rig to UAE-based ADNOC Drilling.

Shelf said on Monday that ADNOC Drilling, a drilling subsidiary of UAE’s national oil company ADNOC, would buy the Shelf Drilling Journey jack-up drilling unit.

According to the company, ADNOC will pay $77.6 million. The transaction is subject to customary closing conditions, and the rig is expected to be delivered during the first quarter of 2021.

It is worth noting that the Shelf Drilling Journey rig is a Gusto CJ-46 design rig, delivered by China Merchants in 2019.

To remind, Shelf bought two such rigs from China Merchants for a price of $87 million per rig in February 2019. At the same time, it entered into bareboat charters of two additional CJ46 jack-up rigs. Shelf also had and the option to buy the chartered rigs.

The initial term of each bareboat charter was three years with a possibility to extend them for an additional three years.

Shelf has the option to acquire one or both of the rigs for $90 million per rig during the first year of the charter period, or a few million north of that in the second or third year.

The first two three-legged jack-up rigs – Shelf Drilling Achiever and Shelf Drilling Journey – were delivered. But the charter of the other two jack-ups of the same type was cancelled in September this year. The termination was effective following a settlement of a total charter payment of $4 million.

According to the company’s fleet status, the Journey arrived in Bahrain in July 2019 and has been idle ever since.

In recent company news, Shelf said last month that it was selling five of its stacked drilling rigs. The rigs in question were four jack-up rigs and one heavy swamp-barge – Trident 15, Hibiscus, Randolph Yost, Galveston Key, and Key Hawaii.

The rigs are stacked and located in Malaysia, Indonesia, USA, UAE, and Bahrain, respectively. They were built in 1982, 1979, 1979, 1978, and 1983, respectively.

Another drilling contractor that sold five of its cold-stacked drilling rigs in November 2020 was Noble Corp.