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

Velesto’s Drilling Rigs Up for Automatization Overhaul Under New Tech Alliance

Keppel Reclaiming Control of 13 Rigs to Cash In on Offshore Drilling Market's Growth

Impending Shortage of Jackups within Ageing Asia Pacific Fleet

ADNOC Signs 15-Year LNG Supply Deal with Indian Oil

Transocean Scoops $123M Drillship Deal in India

CNOOC Brings Online Another South China Sea Field

DOF Subsea Grows Its APAC Backlog

‘World’s Largest’ Floating Wind Platform on Its Way to Offshore Site in China

Valeura Set to Restart Wassana Production Offshore Thailand

China’s CNOOC Hits ‘High Yield’ Well in in Beibu Gulf

Current News

Sapura Scoops Petrobras Contract for Pan-Malaysia Offshore Services

Velesto’s Drilling Rigs Up for Automatization Overhaul Under New Tech Alliance

US Firm Finds Chinese Partner to Deliver Mobile Offshore Drilling Units

TotalEnergies and Oil India to Jointly Tackle Methane Emissions Issues

Keppel Reclaiming Control of 13 Rigs to Cash In on Offshore Drilling Market's Growth

Global Offshore Wind Stumbles to the End of '24

Seatrium Delivers Fifth Jack-Up to Borr Drilling

Malaysia's FPSO Firm Bumi Armada Eyes Merger with MISC’s Offshore Unit

Global OTEC Presents OTEC Power Module for Remote Offshore Platforms

Beam’s AI-Driven AUV to Hit Offshore Wind Market in 2025

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