KCA Deutag - comment

KCA announced this morning that they have (been forced to) sell their 5 rigs based in Nigeria. The sale reflects the recent Nigerian "Local Content Act", which encourages increased indigenous ownership and utilisation of assets. Of the 5 rigs in Nigeria, one commenced operations in Q3 2021, while another was expected to commence in Q4 2021. The sale price of $18m, roughly $3.5m per rig, is definitely lower than our expected asset coverage which is crudely c.$10m per rig. While acknowledging that there are only 1/2 operating out of the 5 rigs in Nigeria, the sales price is a little disappointing. However, in the wider valuation of KCA Deutag, which owns 76 rigs, 49 of which are operating, it is small. More important is the fact that KCA Deutag owns and operate 17 rigs in Russia. No further update from the Company on that.