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

Santos and QatarEnergy Agree Mid-Term LNG Supply

PTTEP Hires Velesto’s Jack-Up Rig for Drilling Campaign off Malaysia

Yinson Production Secures $1.17B Refinancing for FPSO Maria Quitéria

Chuditch Gas Field Drilling Ops Get Delayed to Next Year

Valeura Concludes Eight-Well Drilling Campaign in Gulf of Thailand

Velesto’s Jack-Up Rig Set for Drilling Job off Indonesia

Chuditch Gas Field Up for Summer Drilling Ops as Sunda Reshapes Ownership Structure

CNOOC Puts Into Production New Oil Field in South China Sea

Sunda Energy Starts Environmental Consultation for Chuditch-2 Well Drilling Plans

Pakistan’s OGDC to Start Production at ADNOC’s Offshore Block by 2027

Current News

EnQuest Acquires Harbour Energy’s Vietnamese Assets

Woodside Finds South Korean Partners to Advance LNG Value Chain

Valeura Makes Progress with Multi-Well Drilling Campaign in Gulf of Thailand

Santos and QatarEnergy Agree Mid-Term LNG Supply

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

One Shelf Drilling Rig Up for New Job in India, Other for Disposal

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

PTTEP Hires Velesto’s Jack-Up Rig for Drilling Campaign off Malaysia

Yinson Production Secures $1.17B Refinancing for FPSO Maria Quitéria

Centrica and Thailand’s PTT Ink Long-Term LNG Supply Deal

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