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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): July 12, 1999
TRANSOCEAN OFFSHORE INC.
(Exact name of registrant as specified in its charter)
CAYMAN ISLANDS 1-7746 N/A
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
4 GREENWAY PLAZA
HOUSTON, TEXAS 77046
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (713) 232-7500
ITEM 5. OTHER EVENTS.
On July 12, 1999, Transocean Offshore Inc. ("Transocean") issued a press
release (the "Press Release") announcing the signing of a definitive merger
agreement (the "Merger Agreement") among Transocean, Sedco Forex Merger
Subsidiary, Ltd., a wholly owned subsidiary of Transocean ("Merger Sub"),
Schlumberger Limited ("Schlumberger") and Sedco Forex Holdings Limited, a wholly
owned subsidiary of Schlumberger ("Sedco Forex"). On the same date, Schlumberger
and Sedco Forex separately entered into a definitive distribution agreement (the
"Distribution Agreement"). Pursuant to the Merger Agreement and the Distribution
Agreement, Sedco Forex, which constitutes or will constitute a substantial
portion of the offshore contract drilling business of Schlumberger, will be spun
off to the stockholders of Schlumberger (the "Distribution"), and promptly
merged with and into Merger Sub (the "Merger"), thereby becoming a wholly-owned
subsidiary of Transocean. The Distribution and the Merger are expected to be
free of U.S. federal income taxes.
Following the Distribution and the Merger, Schlumberger stockholders will
own 52 percent of the diluted shares in the combined company, which will be
renamed "Transocean Sedco Forex Inc." The diluted ratio of ownership in the
share capital of the resulting company is fixed by the Merger Agreement and not
subject to adjustment. Based on the outstanding diluted share count of
Transocean on June 30, 1999 (approximately 101 million shares), Schlumberger
stockholders would receive approximately 109 million shares in the combined
company. Using the Schlumberger shares outstanding on June 30, 1999,
Schlumberger stockholders would receive approximately one newly issued
Transocean Sedco Forex share for every five Schlumberger shares held. The 109
million shares to be issued in the Merger would be valued at approximately $3.2
billion using the closing price of Transocean shares on July 9, 1999. At the
effective time of the Merger, Sedco Forex will have approximately $435 million
in debt, subject to adjustment based on agreed levels of working capital and
capital expenditures, among other matters. The Merger will be accounted for as a
purchase, with Sedco Forex as the accounting acquiror.
The transactions described above have been approved by the board of
directors of each of Transocean and Schlumberger and are expected to close by
December 31, 1999, subject to the approval of the shareholders of both
companies, various regulatory approvals, including expiration or termination of
the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and
registration of the shares to be issued in the Merger with the Securities and
Exchange Commission, and other customary closing conditions.
The Press Release is included as an exhibit to this Current Report on Form
8-K and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibits are filed herewith:
99.1 Press Release of Transocean Offshore Inc. dated July 12, 1999.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRANSOCEAN OFFSHORE INC.
Date: July 26, 1999
By: /s/ ROBERT L. LONG
Robert L. Long
Senior Vice President, Chief
Financial Officer and
Treasurer
3
EXHIBIT INDEX
ITEM NO.
99.1 Press Release of Transocean Offshore Inc. dated July 12, 1999
4
EXHIBIT 99.1
ooooooooooooooooooooooooooooo
TRANSOCEAN OFFSHORE INC.
Post Office Box 2765
Houston TX 77252 2765
[TRANSOCEAN LOGO]
oooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo
NEWS RELEASE
CONTACT: Jeffrey L. Chastain FOR RELEASE: July 12, 1999
713 232 7551
TRANSOCEAN OFFSHORE AND SCHLUMBERGER
COMBINE FORCES TO CREATE THE LEADING
OFFSHORE DRILLING COMPANY
HOUSTON--Transocean Offshore Inc. (NYSE: RIG) and Schlumberger Limited
(NYSE: SLB) today announced the signing of a definitive merger agreement under
which the offshore contract drilling business of Schlumberger (Sedco Forex
Offshore) will be spun off and promptly combined with Transocean Offshore in a
merger of equals. The resulting company, Transocean Sedco Forex, will be the
world's largest offshore drilling company and is projected to become the fourth
largest oilfield service company in terms of market capitalization. The
transaction, which should close by December 31, 1999, is anticipated to be
modestly dilutive to Transocean Offshore's current earnings expectations for
2000 and accretive thereafter.
Under the proposed agreement, Schlumberger stockholders will own 52
percent of the fully diluted stock in the resulting company, Transocean Sedco
Forex. Based on the outstanding fully diluted share count of Transocean Offshore
on June 30, 1999 (approximately 101 million shares), Schlumberger stockholders
would receive approximately 109 million shares in the resulting company. Using
the Schlumberger shares outstanding on June 30, 1999, Schlumberger stockholders
would receive approximately 1 newly issued Transocean Sedco Forex share for
every 5 Schlumberger shares held. The 109 million shares to be issued for the
transaction would be valued at $3.2 billion using the closing price of
Transocean Offshore stock on July 9, 1999. The fully diluted ratio of ownership
in the stock of the resulting company is fixed and not subject to adjustment.
The spin-off and the merger transactions are expected to be free of US federal
income taxes and will be accounted for as a purchase with Sedco Forex Offshore
as the accounting acquirer.
The agreement has been approved by the Boards of Directors of Transocean
Offshore and Schlumberger, and is subject to the approval of the stockholders of
both companies as well as regulatory approvals and other customary closing
conditions. Following the closing of the transaction, the shares of Transocean
Sedco Forex will be traded on the New York Stock Exchange under the symbol RIG.
The merger of Transocean Offshore and Sedco Forex Offshore will bring
together two of the most modern and versatile fleets in the offshore drilling
industry and create a truly global offshore drilling company. The company will
have operations in all of the world's major offshore drilling regions including
the North Sea, the Gulf of Mexico, Southeast Asia, West Africa and Brazil.
Transocean Sedco Forex will have the world's largest offshore rig fleet with 75
units. Sedco Forex Offshore will bring a fleet of 44 mobile offshore drilling
rigs, including 27 semisubmersibles, 2 deepwater drillships, 11 jackups and 4
tender rigs. The rig numbers include 3 semisubmersibles under bareboat charter,
and 2 semisubmersibles and 1 drillship under management contract.
Transocean Offshore's fleet of 31 rigs consists of 20 semisubmersibles, 5
deepwater drillships and 6 jackups. The combined fleet totals include 7 rigs
under construction including, for Sedco Forex Offshore, 3 Sedco Express-design
semisubmersibles and 1 jackup and, for Transocean Offshore, 3 Discoverer
Enterprise-class drillships. The combined worldwide work force will consist of
approximately 7500 people.
Schlumberger indicated that in 1998, Sedco Forex Offshore revenue and net
income included in the consolidated Schlumberger results were $1.1 billion and
$390 million, respectively. In 1999, net income from Sedco Forex Offshore is
expected to represent around 15% of the annual net income of Schlumberger.
Victor E. Grijalva, Vice Chairman of Schlumberger, will become Chairman of
Transocean Sedco Forex, while J. Michael Talbert will be President and Chief
Executive Officer. The Board of Directors of Transocean Sedco Forex will be
composed of 10 persons, 5 designated by Schlumberger and 5 by Transocean
Offshore.
Euan Baird, Chairman and CEO of Schlumberger commented: "The transaction
between Sedco Forex Offshore and Transocean Offshore will create the largest and
most technically advanced offshore drilling company in the world. This is also a
strategic move for Schlumberger that will permit our Oilfield Services
GeoMarkets to focus our resources on further extending our leadership in
value-added reservoir optimization services. Furthermore, the transaction
includes a provision for a global alliance between Schlumberger and Transocean
Sedco Forex to address, proactively, integrated services opportunities."
J. Michael Talbert, Chairman and Chief Executive Officer of Transocean
Offshore added, "The merger of Transocean Offshore with Sedco Forex Offshore is
advantageous due to the rising capital costs for new rig construction, the
increasing size and needs of our customers, the expanding geographic diversity
of offshore drilling and the technical challenges posed by new deepwater
drilling activities. Transocean Sedco Forex will be uniquely positioned to
address these challenges due to its technical leadership, financial strength and
global presence. Both Transocean Offshore and Sedco Forex Offshore have been
leaders in offshore drilling for several decades. This position of leadership is
the result of technical innovation and operational expertise, particularly in
deepwater locations. Two strong operations will now become one, forming what I
believe will be the offshore drilling company of choice for customers, employees
and investors."
The senior management of Transocean Offshore and Schlumberger will host a
conference call on Monday, July 12, 1999 at 10:00am Eastern Time to give
investors and the press further insight into today's announcement and respond to
questions. All individuals interested in participating in the conference call
should contact (1-800) 819-9193 toll free in the US and Canada, or (1-913)
981-4911 direct worldwide. A replay will be available for one week beginning at
4pm Eastern Time today at (1-888) 203-1112 toll free in the US and Canada, or
(1-719) 457-0820 direct worldwide. Passcode 728124 should be used to access the
recording for both replay numbers.
This press release and any oral statements made in connection herewith
contain forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements include, among
other things, statements regarding the prospects for and development of the
combined operations of Sedco Forex Offshore and Transocean Offshore, the
integration of their business and operations, accretion and dilution to earnings
from the transaction and resulting market capitalization, all of which are
subject to certain risks, uncertainties and assumptions. These risks and
uncertainties, which are more fully described in the Annual, Quarterly and
Current Reports of Schlumberger and Transocean Offshore and other filings with
the Securities and Exchange Commission, include changes in industry and market
conditions and the price of oil and gas, and the impact of such changes on
Schlumberger and Transocean Offshore. Should one or more of these risks or
uncertainties materialize, or should the assumptions prove incorrect, actual
results from the business of the combined company may vary in material aspects
from those currently anticipated.
Schlumberger is a worldwide leader in technical services with 60,000
employees and operations in over 100 countries. In 1998, revenue was $11.82
billion.
Transocean Offshore is an international offshore drilling company engaged
in contract drilling of oil and gas wells. The Company specializes in
technically demanding segments of the offshore drilling business, including
industry-leading positions in deepwater and harsh environment drilling services.
The Company also provides international turnkey, coiled tubing and integrated
drilling services to customers worldwide.
Note: Offshore Rig details for Sedco Forex Offshore and Transocean
Offshore are attached below.
### 99-09
TRANSOCEAN OFFSHORE INC. FLEET
TYPE AND NAME YEAR ENTERED SERVICE/UPGRADED(1) LOCATION
SEMISUBMERSIBLES
Polar Pioneer 1985 Norwegian North Sea
Transocean Arctic (2) 1986 Norwegian North Sea
Henry Goodrich (3) 1985 U.K. North Sea
Paul B. Loyd, Jr. (3) 1991/1993 U.K. North Sea
Transocean Leader 1987/1997 Norwegian North Sea
Transcoean Rather 1988 U.S. Gulf of Mexico
Transocean Richardson 1988 U.S. Gulf of Mexico
Transocean Explorer 1976 U.K. North Sea
Transocean Discoverer 1977/1985 U.K. North Sea
Transocean Wildcat (2) 1977/1985 Norwegian North Sea
Transocean Winner (2) 1983 Norwegian North Sea
Transocean Searcher (2) 1983/1988 Norwegian North Sea
Transocean Prospect (2) 1983/1992 Norwegian North Sea
Transocean John Shaw 1982 U.K. North Sea
Transocean 96 1975/1997 U.S. Gulf of Mexico
Transocean 97 1977/1997 U.S. Gulf of Mexico
Transocean Driller 1991 Brazil
Transocean Legend 1983 Brazil
Transocean Amirante 1978/1997 U.S. Gulf of Mexico
Transocean Marianas 1979/1998 U.S. Gulf of Mexico
DRILLSHIPS
Discoverer Seven Seas 1976/1997 U.S. Gulf of Mexico
Discoverer 534 1975/1991 U.S. Gulf of Mexico
Discoverer Enterprise 1999 U.S. Gulf of Mexico
Discoverer Spirit 2000 Astano Shipyard
Discoverer Deep Seas 2000 Astano Shipyard
JACKUP RIGS
Transocean Jupiter 1981/1997 UAE
Transocean Comet 1980 Gulf of Suez, Egypt
Transocean Mercury 1969/1998 Gulf of Suez, Egypt
Transocean III 1978/1993 UAE
Shelf Explorer 1982 Danish North Sea
Transocean Nordic 1984 Holland
(1) Dates shown are the original service date and the date of the most recent
upgrade, if any.
(2) Participating in a cooperation agreement with Statoil.
(3) Owned by Arcade Drilling as, a Norwegian company in which the Company has a
25% interest and which is controlled by another contract drilling company.
SEDCO FOREX OFFSHORE FLEET
TYPE AND NAME YEAR ENTERED SERVICE/UPGRADED (1) LOCATION
SEMISUBMERSIBLES
Cajun Express Newbuild Shipyard (Singapore)
Sedco Energy Newbuild Shipyard (France)
Sedco Express Newbuild Shipyard (France)
Sedco 600 1983 Malaysia
Sedco 601 1983 Indonesia
Sedco 602 1983 Singapore
Sedco 700 1973/1994 Turkey (in route)
Sedco 702 1973/1992 Australia
Sedco 703 1973/1995 Australia
Sedco 704 1974/1992 U.K. North Sea
Sedco 706 1976/1994 U.K. North Sea
Sedco 707 1976/1997 Brazil
Sedco 708 1976 Angola
Sedco 709 1977/1998 Nigeria
Sedco 710 1983 Brazil
Sedco 711 1982 U.K. North Sea
Sedco 712 1983 U.K. North Sea
Sedco 714 1983 U.K. North Sea
Sedneth 701 1972/1993 U.K. North Sea
Sovereign Explorer 1984 U.K. North Sea
Actinia 1982 Spain
Sedco 135D 1966 Brazil
Drillstar (2) 1982 U.K. North Sea
Sedco Explorer (2) 1975/1995 U.K. North Sea
Omega (3) S. Africa
FPS Bill Shoemaker (4) Canada
Sedco I-Orca (4) S. Africa
DRILLSHIPS
Sagar Vijay (4) India
Joides Resolution (5) Research Project
JACKUPS
Trident 2 1977 India
Trident 4 1980/1998 Angola
Trident 6 1981 Nigeria
Trident 8 1981 Nigeria
Trident 9 1982 Vietnam
Trident 12 1982 Brunei
Trident 14 1982 Angola
Trident 15 1982 Vietnam
Trident 16 1982 Thailand
Trident 17 1983 Vietnam
Trident 20 (6) Newbuild Singapore/Baku
TENDER RIGS
Searex 10 1983 Congo
Searex 5 1983 Malaysia
Searex 11 1983 Indonesia
Searex 9 1981 Congo
(1) Dates shown are the original service date and the date of the most recent
upgrade, if any.
(2) 25% owned and bareboat chartered.
(3) Bareboat chartered.
(4) Management contract.
(5) 50% owned.
(6) 75% owned.