Ocean Rig announces cancellation of two drilling contracts

By Curious

Ocean Rig UDW Inc., a global provider of offshore deepwater drilling services, announced, that two of its drilling contracts have been terminated. Specifically, TOTAL E&P Congo on February 11, 2016 has given notification to terminate for convenience the long-term contract of the 7th generation ultra-deepwater drillship Ocean Rig Apollo. As per the contract Ocean Rig is entitled to a termination fee that varies from 50% to 95% of the operating daily rate that will be payable over the balance of the contract.

Ocean Rig announces cancellation of two drilling contracts

Image: Ocean Rig

The Ocean Rig Apollo will demobilize from Congo in due course and is available for alternative employment. In connection with the termination of the drilling contract of the Ocean Rig Apollo, the Company has notified the agent under the respective loan agreement and is currently in discussions with its lenders about the consequences of such termination.

In addition, Premier Oil Plc. on February 12, 2016 has terminated the contract for the ultra- deepwater semisubmersible drilling rig the Eirik Raude operating in the Falkland Islands. Ocean Rig has accepted Premier Oil Plc.’s termination for convenience and is entitled to a termination fee of up to $62.9m.

In case Premier Oil Plc. contests the payment of such fee we intend to commence arbitration proceedings without any further notice. The Eirik Raude will demobilize from the Falkland Islands in due course and is available for alternative employment.

About Ocean Rig UDW Inc.

Ocean Rig is an international offshore drilling contractor providing oilfield services for offshore oil and gas exploration, development and production drilling, and specializing in the ultra deepwater and harsh-environment segment of the offshore drilling industry. Ocean Rig owns and operates 13 offshore ultra deepwater drilling units, comprising of 2 ultra deepwater semisubmersible drilling rigs and 11 ultra deepwater drillships, 1 of which is scheduled to be delivered to Ocean Rig during 2017, 1 of which is scheduled to be delivered during 2018 and 1 of which is scheduled to be delivered during 2019.

Source: Ocean Rig