Hercules Offshore has signed contracts to provide Saudi Aramco with two jackup drilling rigs for three-year terms plus one-year fixed price options at the same rate.
The contracts are for the Hercules 300 and Hercules 261, currently known as High Island I and High Island VIII. Hercules 300 was acquired from Transocean on March 14, while the closing on the purchase of Hercules 261 from Transocean is expected on the completion of its current contract commitment in May. Hercules Offshore is negotiating contracts for the dry tow transportation of the rigs from the Gulf of Mexico to a shipyard in the Middle East in the second quarter of 2008. There, the rigs will undergo 90 to 120 days of contract preparation work. The contracts with Saudi Aramco will begin around Sept. 30. Potential revenue from the three-year contracts totals around US$151 million for Hercules 300 and US$140 million for Hercules 261, excluding payment to the company of reimbursable expenses and a total of around US$25 million for mobilization of the two rigs. Hercules Offshore CEO and President Randy Stilley said, "The acquisition of these high quality rigs, coupled with their redeployment to the Middle East, reflects the culmination of another key step in the execution of Hercules Offshore's strategic plan. We are extremely pleased to establish a relationship with one of world's largest operators, Saudi Aramco. These contracts, together with our recent contracts with ONGC in India, reaffirm our position as one of the world's leading shallow water offshore drillers."
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