Oil and gas driller Noble Corp. NEBLQ, which emerged from Chapter 11 bankruptcy last month, on Thursday said that it would take over Pacific Drilling, which emerged from Chapter 11 in December.
It’s an all-stock deal. Noble will pay 16.6 million of its shares, about 24.9% of its shares outstanding, for Pacific Drilling.
Pacific Drilling’s shares appear to have last traded on the pink sheets at 5.29 cents each.
“Noble expects to realize annual pretax cost synergies of at least $30 million and, additionally, will move to dispose of the Pacific Bora and Pacific Mistral expeditiously,” Noble said.
The companies expect to close the deal in April.
“The acquisition expands and further solidifies our relationship with certain key customers, facilitates reentry into both the West African and Mexican regions, and strengthens our presence in the U.S. Gulf of Mexico,” Noble Chief Executive Robert Eifler said in a statement.
The energy industry took it on the chin early in the COVID pandemic, when oil prices plunged.
But in the past six months oil has soared 46% to $59.11 a barrel as investors were enthused about the distribution of vaccines and the prospect of economic recovery. That move has boosted energy stocks.
Oil jumped Wednesday after a Taiwanese container ship blew off course in the Suez Canal, creating a bottleneck that could slow the delivery of more than 13 million barrels of crude through one of the world's busiest waterways.
Jeff Marks, senior portfolio analyst with TheStreet.com Founder Jim Cramer's Action Alerts PLUS investing club, earlier this month explained the team’s take on oil.