Offshore rig firm Borr Drilling said March 22 its CEO Simon Johnson was leaving the company in light of its acquisition of rival Paragon Offshore.
Borr Drilling offered to buy Paragon Offshore for $232.5 million in February.
The company said Johnson had agreed to terminate his contract in view of the Paragon transaction. He had previously worked at Noble Corp., which spun its older assets into Paragon Offshore in 2014, just before an oil market downturn started.
Paragon emerged from Chapter 11 bankruptcy in the U.S. last July, eliminating about $2.3 billion of debt.
Borr Drilling, founded in 2016 by chairman Tor Olav Troeim, also said March 22 it was no longer looking to expand its fleet significantly.
Borr Drilling will seek to raise $250 million in issuing up to 54.3 million new shares at a price of $4.6 per share to finance the Paragon acquisition, the company said. The issue is equivalent to 11.4% of outstanding shares.
Schlumberger, the world’s largest oil service firm, is Borr Drilling’s biggest shareholder with 15.8%.
The Oslo-listed company grew rapidly by buying jackup rigs from Hercules, Transocean and PPL.
Borr Drilling said it was likely to scrap 21 older jackup rigs out of Paragon’s total fleet of 32 rigs.
“We... see today few additional assets to be acquired. Borr is now close to the finish line building the leading jackup drilling company both in terms of operations and assets,” Troeim said.
Borr Drilling said it will own 24 rigs after the transaction, including rigs under construction, and expected rig day rates to start rising into 2019 as oil firms increase capital spending on exploration after years of cuts.
The Paragon offer expires on March 24 and is expected to close by about March 27, Borr Drilling said.
COO Svend Anton Maier will replace Johnson, who had been with the firm since last August, as interim chief executive with immediate effect, the company said.
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