Last week, we wrote a two-parter on the acquittal of Nigeria’s former oil minister in a corruption case in London, and on the landmark judgement in Hamburg affirming seafarer’s rights in the case of the tanker wrongfully detained Heroic Idun, whilst noting that the killing of three Indian seafarers by American forces off Oman on the tanker Settebello was going completely unpunished.
This week, we have more corruption cases, more "dark fleet" legal woes, and the banging of the sale gavel in another Saudi jackup buying spree.
One of the biggest disruptions of offshore drilling in the last six years has been the transformation of ADES from being a small and shoddy, mainly Egyptian-focused drilling business, which was publicly listed in London, to a Riyadh-listed entity controlled by the Saudi Arabian sovereign wealth fund.
ADES now owns the largest fleet of jackup rigs in the world, with 83 shallow-water offshore rigs and 40 land rigs in its fleet at the end of March, a transformation we set out here.
This week, the ADES fleet just got larger and reached 88 rigs with the announcement that ADES would be buying five jackups from Saipem in the Arabian Gulf for US$285 million.
As Saudi Aramco ramped up drilling demand from 2022 onwards, ADES embarked on a buying spree of secondhand rigs from all over the world and many different international contractors including Maersk Drilling, Noble, Valaris, Vantage and various Mexicans, culminating in the US$379 takeover of Shelf Drilling and its fleet of 33 jackup drilling rigs last year.
ADES has emerged as the undisputed leader in the Saudi Arabian drilling market and has used the Shelf acquisition to increase its international footprint, recently winning contracts in Nigeria in March 2026 for three premium jackup rigs with a total value of approximately US$720 million, as well as a one-year firm period with a one-year unpriced option for its premium jackup rig Shelf Drilling Scepter with Chevron Nigeria, and a contract award from Valeura Energy in April 2026 for the provision of offshore drilling services in Thailand, as per its April investor presentation.
The acquisition of the five Saipem rigs cements ADES’ leadership in shallow water drilling. It has now acquired a fleet comprising three Saipem-owned jackup rigs (Perro Negro 7, Perro Negro 8, and Perro Negro 10) and two leased jackup rigs (Perro Negro 11 and Perro Negro 13). The leased rigs were taken on charter by Saipem from Chinese shipyard CIMC Raffles in 2022 and 2023 for five-year firm terms, with two option years, against Saudi Aramco contracts.
Another big development of 2025 was the announcement that Saipem and Subsea 7 would be merging to form an offshore construction and installation powerhouse. That merger is progressing slowly, but this week received welcome news in Brazil, when the competition regulator CADE approved the merger without any conditions.
Petrobras, Exxon and Total had protested that the combined market share of Saipem and Subsea 7 in the country was too great. The two companies enjoy 44 per cent market share with Petrobras, and the oil majors had spent nine months fighting the merger in Brasília, highlighting that the combined entity will own eight of the twelve highest-spec subsea installation vessels in the world.
The jackups were always going to be marginal for Subsea 7, unlike the deepwater and harsh environment Saipem drilling fleet, which serves shareholder Eni across the world. Saipem was rebuffed in its efforts to buy the drillship Deep Value Driller, which was sold to Eldorado for US$300 despite being on a bareboat to Saipem and despite Saipem offering US$272.5 million, as per the seller’s investor update.
Selling the five jackups provides a much-needed war chest for Saipem and a number that is conveniently close to the price of buying a replacement deepwater drillship when Deep Value Driller leaves its fleet in a few weeks. With Eni announcing a possible third floating LNG project in Mozambique, and further field development plans for Ivory Coast and Indonesia, demand from Saipem’s shareholder is for drilling in deepwater, not in the Arabian Gulf, and not with Saudi Aramco. Let’s see if a gavel falls on a purchase by Saipem. Can do?
The deal makes sense both for ADES to consolidate the market and for Saipem to spin off another non-core business ahead of the Subsea 7 merger. In 2022, Saipem had previously sold its onshore drilling business to KCA Deutag for US$488 million and a 10 per cent shareholding in KCA.
Whilst Saipem’s rig disposals were clearly backed by its key shareholder Eni to suit Eni’s deepwater strategy, Seacor Marine Holdings, has a different problem.
Last week, Jorey Chernett, founder of Pointilist Family Office and the largest shareholder of Seacor, wrote a letter to the board of the company. Pointilist owns approximately seven per cent of the liftboat and offshore supply vessel operator, and has declared that “enough is enough”.
Mr Chernett called for the evaluation of “strategic alternatives” for the company, including an orderly sale of the company or a dual-track fleet sale. This must have had Tidewater CEO Quintin Kneen licking his lips in anticipation.
Seacor owns 17 platform supply vessels (PSVs), 21 fast crewboats, and five liftboats. The company’s consolidated operating revenues for the first quarter of 2026 were US$44.3 million, but it made an operating loss of US$6.4 million, despite direct vessel profit from operations but before interest of US$6.7 million (filing here). Seacor has two new building diesel electric PSVs under construction in China.
Mr Chernett’s point is that there is an extreme divergence (in his opinion) between the broker-appraised value of the company’s fleet of more than US$20 per share, and the company’s actual current stock price, which was US$6.68 when he wrote the letter, but jumped to US$7.55 at close on Friday as investors anticipated a takeover or sale of the business.
Could the problem be that many shipbrokers are overly optimistic in their valuations and that Seacor’s fleet of liftboats, especially, is not very liquid and is hard to value? Er, of course not.
Mr Chernett attributed the “extreme structural value dislocation” to operational and utilisation failures the company. He does have a point that the 54 per cent utilisation rate for the Seacor PSV fleet in the first quarter was dire and that whilst the European fleet was operating at 78 per cent, the utilisation in Latin America of just 43 per cent was disappointing.
He called for corporate overhead (which was just under US$10 million in the first quarter of 2026) to be cut aggressively and quickly, in order “to preserve vital cash runway and demonstrate to the market that management is finally aligned with shareholder reality.”
Mr Chernett demanded the immediate sale of the liftboats in the Middle East to a regional operator like HEA, ADNOC or GMS, or that the company should somehow take them out of the region now to maintain operational flexibility while contemporaneously pursuing a sale. Quite how this would be achieved given the on/off closure of the Strait of Hormuz was not clear, but ranting shareholders often don’t apply logic.
The angry shareholder fulminated that the cash proceeds from the liftboat fleets sale and the overhead savings must be directed towards paying off a large portion of the outstanding debt. Mr Chernett believes that Seacor’s current interest expense is an unsustainable drain, costing shareholders approximately US$100,000 per day.
Then he said that the Seacor board must pursue a sale of the PSVs and crewboats to what he hoped would be “a strategic buyer” (surely not Tidewater?) for either cash or stock of the acquirer. Preserving these segments together ensures maximum leverage with strategic suitors, who can acquire the core fleet for either cash or stock of the acquirer.
The Yahoo! Finance coverage is here and the full text of the letter is here.
Seacor said its, “board of directors and management team welcome the input of its shareholders with the goal of enhancing long-term value, and intend to closely review the letter.”
OK. Let’s see whether the gavel falls on the company, or an axe falls on the management.