Seawell to acquire Allis-Chalmers Energy for $890MM

By Phaedra Friend Troy

Drilling and well services company Seawell Limited (NOTC:SEAW) is acquiring drilling, rental and oilfield services company Allis-Chalmers (NYSE:ALY) in a $890 million definitive merger agreement.

Providing drilling and well services, the combined company will operate in more than 30 key oil and gas regions, including the US, Gulf of Mexico, Brazil, Argentina, North Sea, Middle East, Africa and Asia Pacific. With 6,500 employees, the combined company is estimated to have revenues of $1.3 billion and a contribution capital or EBITDA of $195 million in 2010. 

"We are very pleased to welcome Allis-Chalmers’ employees and management to Seawell," said Seawell's executive chairman, Jorgen Peter Rasmussen. "This is a major step in our quest to create a global first-class drilling and well services company focused on assisting our customers in producing more hydrocarbons from their existing fields. We complement each other with a much improved geographical footprint, similar focus on customers and a wider range of technology and services, which we are now able to offer to our combined customer base."

Combined drilling services will include platform drilling, land contract drilling, modular rigs, drilling maintenance, directional drilling, underbalanced drilling, facility engineering services, rig and riser inspection and oilfield rentals. Additionally, the company will offer fully integrated drilling services, for both onshore and offshore operations, with more than 4,000 experienced drilling professionals and senior directional drillers.

The well services segment of the business will include electric and mechanical wireline services, production logging services, coil tubing services, ultrasonic investigation logging services, down-hole cameras and advanced well fishing services.

After the merger, Jorgen Peter Rasmussen will be the company's new CEO and president, as well as a member of the board of directors. The current CEO of Seawell Management, Thorleif Egeli will become the new company's COO and executive VP.

The merger is subject to the approval of the Allis-Chalmers' stockholders, as well as that of HSR. The close is expected by the end of 2010.

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