TransAtlantic To Sell Viking Oilfield Service Assets
To buy subsidiaries Viking International Ltd. & Viking Geophysical Services Ltd. which provides 7 drilling rigs & service equipment that operate in Turkey & Morocco.
A consortium consisting of a joint venture owned by Oklahoma City-based private-equity firm Dalea Partners LP and funds advised by Abraaj Investment Management Ltd., an affiliate of Dubai, U.A.E.-based private-equity firm Abraaj Capital, has closed the purchase of oilfield services business from TransAtlantic Petroleum Ltd., Hamilton, Bermuda, (Toronto: TNP; NYSE Amex: TAT) for $167.2 million.
Dalea Partners is an affiliate of N. Malone Mitchell 3rd, TransAtlantic’s chairman and chief executive.
The consortium paid approximately $155.7 million in cash and Dalea issued a $11.5-million promissory note.
The assets include TransAtlantic’s subsidiaries Viking International Ltd. and Viking Geophysical Services Ltd. Viking has seven drilling rigs and service equipment that operate in Turkey and Morocco.
Viking International and Viking Geophysical expect to enter into five-year master services agreements that will ensure TransAtlantic has continued access to Viking's equipment and services at market prices.
TransAtlantic used a portion of the net proceeds from the sale to pay off its $73-million credit agreement with Dalea, its $11-million credit facility with Dalea, its $900,000 promissory note with Viking Drilling LLC, and its $1.8-million credit agreement with a Turkish bank.
TransAtlantic plans to use between approximately $50 million and $60 million of the remaining net proceeds to reduce borrowings under the company's senior secured credit agreement with Standard Bank Plc and BNP Paribas (Suisse) SA. The company currently has outstanding borrowings of $78 million under the senior secured credit agreement.
Mitchell says, “The sale immediately strengthens the company's balance sheet and reduces administrative complexity just as we are evaluating the early stages of a development program in the Thrace Basin, continuing to test additional Thrace Basin structures, and testing potential resource plays in southeastern Turkey.”