HOUSTON, Aug. 10, 2007 (PRIME NEWSWIRE) -- Pride International, Inc. (NYSE:PDE) today announced that it has entered into a definitive agreement to sell its Latin America land-based drilling and workover business and its E&P Services business to GP Investments Ltd., the leading private equity firm in Latin America. The transaction, which is subject to customary closing conditions, is expected to close by the end of the third quarter of 2007.
Under the terms of the agreement, GP Investments will pay $1.0 billion in cash at closing for the two business segments. The purchase price is subject to a customary working capital adjustment. Proceeds from the sale, which are expected to be largely free of taxation, could be utilized for general corporate and strategic purposes, including potential funding for the construction of the company's two ultra-deepwater drillships and other future growth opportunities.
The Latin America land business is comprised of 73 land drilling rigs, 135 workover rigs and two lake drilling barges. The E&P Services business provides a wide range of services to complete, maintain and enhance production from oil and gas wells, including pressure pumping, integrated, directional drilling and other well services. Combined 2006 revenues for these two business segments totaled $823.9 million, while combined revenues for the six months ended June 30, 2007 were $472.8 million. The businesses operate in eight countries in Latin America. Following the close of the transaction, Pride's remaining land-based drilling and workover operations will consist of five land drilling and workover rigs in Chad along with two other land rigs located in Kazakhstan and Pakistan.
Pride International, Inc. President and Chief Executive Officer, Louis A. Raspino, stated, "The sale of our Latin America land-based business segments represent a significant milestone in the transition of our company and further supports our stated strategic direction. With the close of the transaction, contract drilling operations of Pride International will be almost exclusively offshore, with an increasing focus on deepwater and other high specification assets. Following the completion of this transaction, the percentage contribution to Pride's earnings from operations by our deepwater and midwater floating rig fleets will increase significantly and would have represented in excess of 60 percent of earnings from operations during the second quarter of 2007 after excluding the results from the Latin America land-based operations."
Goldman, Sachs & Co. is acting as financial advisor to Pride, and Baker Botts L.L.P. is acting as legal counsel to the company.
Pride International, Inc., headquartered in Houston, Texas, is one of the world's largest drilling contractors. The company provides onshore and offshore drilling and related services in more than 25 countries, operating a diverse fleet of 277 rigs, including two ultra-deepwater drillships, 12 semisubmersible rigs, 28 jackups, 16 tender-assisted, barge and platform rigs, five managed deepwater rigs and 214 land rigs. The company has two additional ultra-deepwater drillships under construction with expected deliveries in 2010.
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GP Investments is the leading private equity firm in Latin America. GP Investments' activities consist of its core private equity business and its asset management business. Since its inception in 1993, GP Investments and its predecessors have raised more than $2.5 billion from Brazilian and international investors and have acquired 40 companies in 11 different sectors. In May 2006, GP Investments concluded its initial public offering (IPO), becoming the first listed private equity company in Brazil. For more information, see GP Investments' web-site (www.gp-investments.com) or contact its Investor Relations department.
Statements regarding the proposed sale of the business segments, expected proceeds from the sale, expected timing of closing, possible use of proceeds, as well as any other statements that are not historical facts, are forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements are subject to certain risks, uncertainties and assumptions, including those related to the fulfillment or waiver of conditions to closing under the definitive agreement, adjustments to the amount of actual proceeds to be received by the company and other factors disclosed from time to time in the company's filings with the Securities and Exchange Commission. As a result of these factors, actual results may differ materially from those indicated or implied by such forward-looking statements.