Transocean Ltd. has reached definitive agreements to sell 38 shallow water drilling rigs to Shelf Drilling International Holdings for approximately US $1.05 billion.

Shelf Drilling is a newly formed company sponsored equally by Castle Harlan Inc., Champ Private Equity, and Lime Rock Partners.

The sales price includes approximately $855 million in cash, subject to working capital and other closing adjustments, and $195 million in seller financing, a news release states. Seller financing will be in the form of preference shares issued by an affiliate of Shelf Drilling. As a component of the agreement, Transocean will provide various transition support services to Shelf Drilling for a period subsequent to the closing of the transactions. The transactions are expected to close in 4Q 2012, subject to certain conditions.