UK's KCA Deutag has entered into agreement to combine with Oman's Dalma Energy to form an enlarged drilling and engineering group that will give the UK firm increased footprint in the Middle East.
The merger is worth US$320 million and will consist of $100 million of cash and shares to be issued to Dalma’s shareholders valued at $220 million.
The enlarged group will continue to operate under the KCA Deutag brand name.
Norrie McKay, CEO of KCAD, said: “The acquisition of Dalma’s operations in Saudi Arabia and Oman will significantly strengthen our foothold in the Middle East, and provide us with a stronger platform to develop and grow our business in what is an exceptionally attractive region.”
As a result, the enlarged group will be one of the largest owners and operators of land rigs in the Middle East. This enhanced scale should enable the group to deliver operational gearing, as well as potential cost synergies that have been identified.
He added: "Dalma’s operations are an excellent strategic fit, not only consolidating our position in Oman as the country’s leading owner and operator of onshore drilling rigs but also enabling us to offer our operational expertise in the substantial Saudi Arabian onshore drilling market, which has been a key target for KCAD.”