Parker Drilling to sell Nigerian rigsadmin
Parker Drilling Co. has agreed to sell two rigs and related assets located in Nigeria to Shell Petroleum Development Corp. of Nigeria Ltd. for $46 million.
Houston-based Parker (NYSE: PKD) has already received a 10 percent deposit toward the purchase price for Barge Rigs 73 and 75 and anticipates closing the transaction in late June. The company anticipates that it will recognize a gain of $2 million to $2.5 million as a result of the sale.
This transaction will be accretive to earnings, as first-quarter 2006 cash flow from the Nigeria barge operations was slightly above break-even. The company intends to use net proceeds to pay down debt, further enhancing earnings by reducing interest expense.
“This sale is another positive step in our strategic plan to optimize returns on our asset base and to focus on core strategic markets,” said Robert L. Parker Jr., Parker Drilling’s chairman, president and CEO. “Going forward, it will also better position us for long-term consistent profitability.”