ADES moves to take over Shelf Drilling in US$379M cash merger

Saudi Arabian oil drilling group ADES International Holding and Dubai-headquartered Shelf Drilling have signed a deal that, once approved, will see Shelf folded under ADES Group.

The agreement, which is expected to close in Q4 2025, is subject to regulatory approval as well as approval by Shelf Drilling shareholders, who will vote at an Extraordinary General Meeting on 16 September, 2025. 

Shelf Drilling’s board has recommended that shareholders approve the proposal, which has added substantial premiums to the stock valuations of the Oslo Next stock exchange-listed company.

According to a joint statement to investors from the two companies, the terms of the deal have added 62% to Shelf Drilling’s closing share price (Nkr8.64, or US$0.84) for stocks on 4 August 2025 and 56% to the volume-weighted average share price for the last month.

In total, the deal values Shelf Drilling at US$379M, and ADES said the deal would be financed through an available credit facility. 

The companies also said Shelf Drilling’s outstanding US senior notes and a Norwegian bond will be called when the deal closes, amounting to a total principal value of approximately US$1.3Bn. 

ADES chief executive Dr Mohamed Farouk said the deal was "supported by Shelf Drilling’s US$1.5Bn firm backlog and US$40-50M in "anticipated operational cost synergies". 

Shelf Drilling has lately won a significant, US$133M extension deal for its High Island V jack-up rig, adding five years to the rig’s existing term with Saudi parastatal oil and gas supermajor Aramco. After being caught up in the sudden announcement from Aramco in January 2024 that Aramco would be pausing its high-profile oil expansion programme, and seeing four of its rigs hit by suspension notices, Shelf Drilling quickly found takers for three of the four suspended rigs.

The merger of ADES and Shelf Drilling brings together two shallow-water drilling specialists and creates an extensive fleet of offshore drillships, particularly in the jack-up segment, with the companies citing a fleet of 83 offshore jack-ups, following the addition of 33 jack-ups through the transaction.

"With this landmark transaction, we reinforce our position as a market leader in shallow-water offshore drilling, offering superior services to our client base alongside enhanced scale, asset quality, and operational reach," Dr Farouk said.