Shelf Drilling Plans to Raise $500 Million in London Listing

Shelf Drilling Ltd., a Dubai-based rig contractor for the oil and gas industry, plans to raise $500 million through an initial public offering on the London Stock Exchange.

The time is right because of the company’s good revenue outlook and “leading market position,” Chief Executive Officer David Mullen said today on a conference call.

Shelf Drilling, whose customers include Saudi Arabian Oil Co. and Chevron Corp., had an order backlog of $3.4 billion at the end of May. Net debt was $704 million as of the end of March, and will fall to $480 million after the listing, Chief Financial Officer Andrew Roberts said on the call.

The company plans a “competitive” dividend policy, with a payout ratio of about 40 percent to 60 percent of net income, Mullen said.

Shelf Drilling bought 38 rigs from Transocean Ltd. in 2012 and has ordered two new jackups to be built. It’s been backed by private equity firms Castle Harlan, Champ and Lime Rock Partners, according to its website. Its key areas are in shallow waters off India, West Africa, Southeast Asia, and the Middle East.

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