Hercules Offshore Inks North Sea Drilling Gig with Maersk Oil

Hercules Offshore, Inc. announced that it has signed a 5-year drilling contract with Maersk Oil North Sea UK Limited for a newbuild jackup rig to be owned and operated by Hercules Offshore. Total contract value is approximately $420 million, which includes approximately $9 million of mobilization fees. Contract commencement is expected in mid-2016.  

Hercules Offshore has also signed a rig construction contract with Jurong Shipyard Pte Ltd. in Singapore. The rig is based on the Friede & Goldman JU-2000E design, with enhancements that will provide for greater load-bearing capabilities and operational flexibility.  These enhancements are based on collaborative efforts between Maersk Oil, JSL and Hercules Offshore. In addition, this High Specification, Harsh Environment  (HSHE) rig will feature a 400 foot water depth rating, 30,000 foot drilling capacity, two million pounds of static hook load, 75 foot cantilever reach, off-line pipe handling capability, 15,000 psi blowout preventer systems, high pressure/high temperature rating and accommodations capacity for up to 150 personnel. The shipyard cost of the rig is estimated at approximately $236 million. Including project management, spares, commissioning and other costs, total delivery cost is estimated at approximately $270 million. Hercules Offshore initially pays 10 percent of the shipyard cost, or approximately $24 million to JSL, followed by a second 10 percent payment one year after the initial payment. The final 80 percent of the shipyard payment is due upon delivery of the rig, estimated in April 2016. 

Chief Executive Officer and President of Hercules Offshore John T. Rynd stated, "The contract with Maersk Oil is a great achievement for our organization and marks another significant milestone in the development of our Company. Strategically, this opportunity further demonstrates our worldwide capabilities and expands our operational footprint to the North Sea with a leading operator in the region. The rig will operate in the Central North Sea to develop Maersk Oil's high profile Culzean Field. The decision by Maersk Oil to contract a newbuild rig with specific enhancements was driven by the unique challenges to develop this field. Given these enhancements, we expect demand for this rig in the North Sea to extend well beyond the initial five year fixed contract term, with two one-year unpriced options. 

"This investment is also consistent with our commitment to renew our rig fleet with high specification assets that are expected to garner strong long term demand. We have structured the investment to balance between maximizing returns and minimizing investment risk. Cash on hand will be used to fund the initial shipyard payments and we plan to secure project financing to fund the remaining payment as the rig nears delivery."


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies
For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit www.riglogix.com.

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Static Equipment / LNG Tank Engineer
Expertise: Mechanical Engineering
Location: Houston, TX
ARAMCO QM20 Third Party Inspector
Expertise: Electrical Engineering|QA / QC / Inspection|Technical Writing
Location: Bolingbrook, IL
Power Generation Technician
Expertise: Electrical Technician|Electrician|Maintenance Technician
Location: Broussard, LA
search for more jobs

Brent Crude Oil : $51.78/BBL 0.77%
Light Crude Oil : $50.85/BBL 0.83%
Natural Gas : $2.99/MMBtu 4.77%
Updated in last 24 hours