SINGAPORE - Keppel Offshore & Marine (Keppel O&M) has, through its wholly owned subsidiary Keppel FELS, inked a master agreement to sell five jack-up rigs to Oslo-based drilling contractor Borr Drilling for around US$745 million (S$ 1 billion).

These are existing jack-up rigs which are being built by Keppel FELS to the KFELS B class designs, said Keppel in a statement on Wednesday morning (May 16). This price excludes any down payments made by the original owners.

The master agreement is contingent on certain conditions, including Borr Drilling raising sufficient funds. Borr Drilling will pay a first instalment of US$288 million within 20 business days of the effective date of the master agreement and the remaining amounts are payable within five years from the delivery date of each individual rig.

The rigs are scheduled to be delivered from the fourth quarter of 2019 to Q4 2020, with one rig to be delivered next year and four rigs in 2020.

They are in addition to five jack-up rigs ordered from Keppel that Borr Drilling took over last year for US$216 million per rig after it acquired Transocean's entire jack-up fleet.

Chris Ong, chief executive of Keppel O&M, said: "The agreement with Borr Drilling demonstrates that rig owners continue to look for reliable, high quality rigs to maximise efficiency and productivity. This is a win-win agreement for all parties and enables Keppel O&M to further improve our cashflow, minimise the holding risks of the projects, and clear several of the deferred orders."

Chief executive of Borr Drilling, Svend Anton Maier, added: "This is an opportune time for us to grow our fleet of highly capable jack-up rigs as the market is showing signs of recovery from the bottom of the business cycle."