More time needed for Schlumberger, Eurasia Drilling Company merger

A merger between world’s largest oilfield services company Schlumberger and Russian drilling contractor Eurasia Drilling will have to wait some more.

Eurasia Drilling Company has said that the two companies continue to wait for a written final confirmation from the Russian Federal Anti-Monopoly Service and the Government Commission on Monitoring Foreign Investment in relation to the proposed merger.

“In light of this, the parties to the proposed transaction have agreed to further extend the long-stop date for completion of the transaction from 31 May 2015 to 30 Jun 2015. The Company will make a further announcement regarding the expected timing of the completion of the transaction in due course,” Eurasia Drilling Company said.

The deal was announced on January 20, 2015.

Under the agreement, the principal shareholders of EDC will take the company private. Upon delisting of the company from the London Stock Exchange, Schlumberger, through one or more subsidiaries, will acquire a minority equity ownership interest of 45.65% in EDC, in exchange for consideration of $22 per share.

The total cost of acquiring this minority interest, including the cost of a call option and various non-competition agreements, is approximately $1.7 billion. The call option will allow Schlumberger, at its election, to purchase the remaining shares in EDC during a two-year period starting three years from the closing of the transaction.

EDC is the largest provider of onshore drilling services in Russia, as measured by the number of meters drilled, providing onshore integrated well construction services and workover services. The company also provides offshore drilling services in the Caspian Sea and is the largest provider of such services in the sectors where it operates based on the number of jack-up drilling rigs.

The company offers its onshore integrated well construction services and workover services to local and international oil and gas companies primarily in Russia and its offshore drilling services to Russian and international oil and gas companies in the Russian, Kazakh and Turkmen sectors of the Caspian Sea. In addition, the company provides onshore drilling services in Iraq.

 

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