Archer has agreed to acquire an additional 10% of the shares in Iceland Drilling from its joint venture partner Kaldbakur for USD 2.5 million, settled in Archer limited shares, bringing Archer's total ownership to 60%.
Iceland Drilling is an international leader in high-temperature geothermal drilling, with offerings across renewable service segments such as deep drilling for electricity generation, wells for district heating and cooling, and wells for carbon storage. The company has close to 200 employees with its main operations currently in Iceland and the Philippines.
CEO Dag Skindlo comments: 'Geothermal energy is an important part of the future energy mix which has direct overlap and synergies with Archer's core services. We have a clear ambition to increase our well services participation in the growing geothermal market and we are monitoring opportunities to deploy idle and lower specification land rigs to geothermal projects globally. The market for geothermal drilling and district heating is estimated by industry experts to grow meaningfully over the next few decades, and Iceland Drilling is well positioned to capture market share. We will continue to support growth and development of Iceland Drilling and welcome Kaldbakur as a new long-term investor in Archer.'
The increased ownership means that Iceland Drilling will be consolidated into Archer's financial accounts. Inclusion of Iceland Drilling is projected to increase Archer's full year 2024 proforma revenue by approximately 4% and EBITDA by 6-7%. Going forward, the transaction is expected to enhance Archer's cash generation and reduce Archer's leverage ratio. Archer will settle 100% of the USD 2.5 million purchase price with Archer Limited shares. The new shares will be issued in line with the authorization granted to Archer's board of directors by the general meeting on 28 March 2023. The transaction is expected to close within the next two months.
Source: Archer
