Noble Corp to Offer $1.6B for Diamond Offshore

Noble Corporation, a leading offshore drilling contractor, has agreed to buy Diamond Offshore Drilling Inc in a cash and stock deal valued at $1.6 billion as the oil and gas mergers continue with the oilfield services sector.

Sugar Land, TX-based Noble will fund the cash portion of the deal through a $600 million bridge loan.

Diamond shareholders will receive 0.2316 shares of Noble, plus cash consideration of $5.65 per share for each share of Diamond stock, representing a premium of 11.4% to Diamond’s closing price as of last Friday.

The combination creates strong commercial opportunities with complementary customer bases around the world and across rig types, said Noble. The deal is a further boost for the company, which emerged from bankruptcy protection in February 2021.

After completion of the deal, Noble will own and operate a fleet of 41 rigs comprising 28 floaters and 13 jack-ups. The contract backlog for the combined company would be approximately $6.5 billion.

Noble said it expects to realize annual pre-tax cost synergies of $100 million, with 75% expected to be realized within one year of the deal closing. The acquisition is expected to close by the first quarter of 2025.

“Our position will be strengthened with the addition of four 7th generation drillships and one of the most high-spec harsh environment semisubmersible rigs in the world,” Noble president and CEO Robert Eifler, said. “Additionally, Diamond’s five conventional deepwater and midwater rigs have averaged above 85% utilization over the last three years and currently have strong forward contract coverage.”

The Noble-Diamond Offshore deal is not the first transaction in the oilfield services sector this year. In early April, SLB, the world’s top oilfield services provider, announced a definitive agreement to buy smaller competitor ChampionX Corporation in an all-stock deal valued at $7.75 billion.