SeaBird and Energy Drilling Join Forces to Create SED Energy Holdings

SeaBird Exploration Plc and Energy Drilling Pte Ltd have finalized a merger agreement, marking a significant consolidation in the offshore oil and gas services sector. This strategic move aims to enhance shareholder value and create a diversified entity focused on cash generation and sustainable growth.

• SeaBird and Energy Drilling will merge in a share-for-share transaction.
• The new entity will be named SED Energy Holdings and will prioritize shareholder distributions.
• Energy Drilling shareholders will own approximately 89% of the combined company.
• The merger is expected to close in Q2 2025, pending regulatory approvals.

The merger agreement follows a letter of intent signed earlier this year, with both companies aiming to leverage their strengths in the offshore oil and gas market. SeaBird, known for its marine seismic acquisition services, operates two seismic vessels, while Energy Drilling specializes in tender drilling rigs, boasting six assets primarily in Southeast Asia.

The transaction will involve the issuance of approximately 651 million new SeaBird shares to Energy Drilling shareholders, effectively merging the two companies into a single entity with a pro forma market capitalization of around USD 381 million. This merger is expected to create a robust platform for future growth and shareholder returns.

The combined company will focus on:

• Cash Generation: With a strong revenue backlog of USD 490 million, the new entity is well-positioned to generate significant cash flows.
• Shareholder Distributions: The management has committed to distributing excess liquidity on a quarterly basis, with projections indicating a potential dividend yield exceeding 50% of the current share price.
• Market Positioning: The merger will enhance the market presence of both companies, allowing them to better serve the growing demand for natural gas in Southeast Asia.

Ståle Rodahl, Executive Chairman of SeaBird, emphasized the merger’s potential to reduce operational risks and increase scale, stating, "Merging with an operationally and financially robust market leader provides our shareholders with increased scale and reduced operational risk."

Alf C. Thorkildsen, Chairman of Energy Drilling, echoed this sentiment, highlighting the transformative opportunity for stakeholders: "By joining forces with SeaBird, we are creating a publicly listed company uniquely positioned to deliver industry-leading shareholder returns through distributions and accretive growth."

The merger is subject to customary closing conditions, including shareholder approval and regulatory consents. If successful, the new entity, SED Energy Holdings, will not only enhance its operational capabilities but also focus on disciplined capital allocation and sustainable growth opportunities.

As the offshore oil and gas industry continues to evolve, this merger positions SED Energy Holdings as a formidable player, ready to capitalize on emerging market trends and deliver value to its shareholders.

• LOI to merge with leading tender assisted drilling provider Energy Drilling | Seabird Exploration Plc, NTB Kommunikasjon.
• SeaBird and Energy Drilling firm up merger deal, Splash247.
• SeaBird Exploration Finalizes Acquisition of Energy Drilling to Form SED Energy Holdings, TipRanks.