SeaBird to merge with Energy Drilling

Marine seismic specialist SeaBird Exploration and Singapore’s tender drilling rig specialist Energy Drilling are set to merge in a share-for-share deal creating a diversified offshore oil and gas services player.

Under a letter of intent, the transaction will be carried out by issuing about 651m new SeaBird shares to Energy Drilling shareholders. The company will change its name and be listed on the stock exchange, while the seismic and drilling businesses will continue to operate as Seabird Exploration and Energy Drilling.

Oslo-listed SeaBird said that based on its latest closing share price of NOK5.89 ($0.52), currency ratio, net debt and backlog, the combined company would have a pro forma market cap of $381m, net debt of about $44m and an estimated asset EBITDA backlog of more than $320m.

SeaBird has two seismic vessels in its fleet, while the Pioneer Logistics-backed Energy Drilling counts six tender rig assets in Southeast Asia, or about 38% of the world’s actively marketed units, and approximately 80% of available days contracted for 2025 and 2026.

The agreed exchange ratio will result in Energy Drilling shareholders owning 89% of the combined company. The equity value of Energy Drilling in the transaction, which has been backed by board of directors of both companies, is estimated at nearly $400m. SeaBird’s five largest shareholders, including Magnus Halvorsen’s MH Capital, have also supported the transaction. The board and these five shareholders hold about 39% of outstanding shares in SeaBird.

The deal should close in the second quarter of this year, pending satisfaction of certain closing conditions.

“This merger represents a transformative opportunity for our shareholders and other stakeholders. By joining forces with SeaBird, we are creating a publicly listed company uniquely positioned to deliver industry-leading shareholder returns through distributions and accretive growth, while retaining our robust financial position and flexibility,” said Alf Thorkildsen, chairman of Energy Drilling.