Offshore drilling firm Seadrill has agreed to divest legal entities that own and operate seven jack-up drilling rigs in Saudi Arabia to subsidiaries of ADES Arabia (ADES), for a total consideration of $628m in cash.

The sale includes the AOD I, AOD II, AOD III, West Callisto, West Ariel, West Cressida, and West Leda drilling rigs.

Upon completion of the transaction, ADES will also employ the crews operating the rigs. The firm will also hold the contracts related to the drilling rigs.

The proceeds from the sale will be used by Seadrill to de-leverage its balance sheet while eliminating any capital expenditure incurred at the time of closing the deal with regard to the reactivation of three rigs, namely the West Ariel, West Cressida, and West Leda.

Seadrill CEO Simon Johnson said: “The sale of seven jack-ups to ADES is transformative for Seadrill. We are pleased to announce this transaction, which we believe crystallises the valuation of these rigs at a substantially higher level than currently implied in Seadrill’s share price.

“It will also enable us to significantly de-lever our balance sheet, positioning us for future opportunities.”

Seadrill, which owns 21 rigs, including 11 jackup rigs, expects the transaction to have no material impact on its revenue and adjusted EBITDA guidance for 2022.

The transaction is expected to close within the fourth quarter of 2022.

Upon closing the deal, Seadrill will provide limited-period customary transition support services to ADES.