ARO Drilling Secures Financing for Two Newbuild Jack-up Rigs

Thursday, October 26, 2023

Offshore drilling firm ARO Drilling (“ARO”), a 50/50 joint venture between Valaris and Aramco, has secured financing for its first two newbuild jack-up drilling rigs, Kingdom 1 and 2.

According to Valaris, ARO secured 'attractive' financing, by entering into a $359 million term loan with a syndicate of local Saudi Arabian banks to finance the deliveries. 

The proceeds will be used to pay the remaining shipyard purchase price for Kingdom 1 and 2, and for general corporate purposes. The loan matures in eight years and has a 16-year amortization profile with a 50% balloon payment due at maturity.

Kingdom 1 is expected to be delivered and start its contract with Aramco in fourth quarter 2023, and Kingdom 2 is expected to be delivered and commence its contract with Aramco in first quarter 2024.

 Day rates for the initial eight-year contracts will be determined using a pricing mechanism that targets a six-year payback for construction costs on an EBITDA basis. These initial contracts will be followed by a minimum additional eight-year term, re-priced every three years, based on a market pricing mechanism.

ARO Drilling Chief Executive Officer Mohamed Hegazi said, “The delivery and startup of the first two newbuilds will mark an important milestone in the growth story of ARO. I am delighted that we have been able to secure financing for these rigs at attractive terms, demonstrating both the strength of our business and relationship with local lenders in Saudi Arabia.”

Categories: Middle East Drilling Activity Drilling Rigs

Related Stories

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

MDL Secures Cable Laying Job in Asia Pacific

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Yinson Production Nets DNV Approval for New FPSO Hull Design

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

Chinese Contractor Secures Offshore Oil and Gas ‘Mega Deal’ from QatarEnergy

Saipem Wins FEED Contract For Abadi LNG Project FPSO Module In Indonesia

PTTEP Hires Energy Drilling’s Rig for Southeast Asia Offshore Job

Four Jack-Up Drilling Rig Deals Set to Bring In $129M for Borr Drilling

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

Current News

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Aesen, DOC JV Targets Subsea Cable Logistics

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

Seatrium Secures ABS Backing for Deepwater FPSO Design

MDL Secures Cable Laying Job in Asia Pacific

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Yinson Production Nets DNV Approval for New FPSO Hull Design

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com