Diversified offshore oil & gas services provider to arise with new merger

Cyprus-headquartered marine seismic acquisition services provider SeaBird Exploration and Singapore’s tender-assisted drilling provider Energy Drilling have signed a letter of intent (LoI) to merge into a combined company that would offer diversified offshore oil & gas services.

The transaction will include the issuance of approximately 651 million new SeaBird shares to Energy Drilling shareholders. The listed company will in conjunction with the transaction change its name, while the seismic and drilling businesses will continue to operate as SeaBird Exploration and Energy Drilling.

The agreed exchange ratio will result in Energy Drilling shareholders owning 89% of the combined company.

The move is supported by each of the companies’ Board of Directors (BoD) and the shareholders of Energy Drilling. The five largest shareholders in SeaBird have also expressed support for the transaction. Together with shares held by the BoD this constitutes approximately 39% of the shares outstanding in SeaBird.

“Merging with an operationally and financially robust market leader provides our shareholders with increased scale and reduced operational risk,” said Ståle Rodahl, Executive Chairman of SeaBird Exploration.

“Energy Drilling shares our focus on niche market leadership with strong profitability and a capital allocation strategy that prioritizes distribution of all excess cash to shareholders. Based on already solid backlog visibility, our ambition is to create a leading dividend platform within offshore oil and gas services.”

According to SeaBird, the combined company will be a diversified offshore oil & gas services provider with strong cash flows and significant capacity for near-term shareholder distributions. It will be able to pursue growth opportunities within existing segments and in the broader offshore oil services industry, considering only those that are accretive to shareholders while maintaining low financial risk and cash flow visibility.

Based on the latest SeaBird closing share price, currency ratio, net debt and backlog, the combined company will have a pro-forma market capitalization of $381 million, net debt of approximately $44 million and an estimated asset EBITDA backlog of more than $320 million, supporting strong cash flow visibility for the next two years.

Alf C. Thorkildsen, Chairman of Energy Drilling, said: “This merger represents a transformative opportunity for our shareholders and other stakeholders. By joining forces with SeaBird, we are creating a publicly listed company uniquely positioned to deliver industry-leading shareholder returns through distributions and accretive growth, while retaining our robust financial position and flexibility.”

The transaction is subject to certain customary closing conditions such as final documentation, approval of the transaction by a shareholders meeting in SeaBird, confirmatory due diligence by both parties, relevant regulatory approvals and consents, tax redomiciliation of SeaBird to Cyprus and that no mandatory offer for the combined entity will be triggered. It is expected to close in Q2 2025.

However, pending satisfaction of the closing conditions, there can be no guarantee that the transaction will take place.