Friede Goldman Halter Operations Update
Friede Goldman Halter, Inc. announced today that previously announced cost overruns and delays related to the construction by Company affiliates of two (2) offshore rig projects for Ocean Rig ASA ("Ocean Rig") and two (2) offshore rig projects for Petrodrill Four, Ltd. and Petrodrill Five, Ltd. ("Petrodrill") have continued to create operational problems and financial losses for the Company. The Company has been discussing project status and solutions with both Ocean Rig and Petrodrill in an attempt to resolve these issues.
The Company reached an agreement in principle with the surety company which wrote the performance bonds on the Petrodrill project, pursuant to which the surety company has agreed to provide certain funding for the completion of the two rigs under construction for the Petrodrill project. Such agreement is subject to execution of a definitive agreement and certain customary conditions. The project currently employs over 1,000 employees in Texas and Mississippi.
Separately, negotiations today with Ocean Rig have not reached an agreement on terms necessary to enable the Company to complete the two rigs being constructed for Ocean Rig. The Company does not intend to complete the rigs which, without an agreement, would require substantial additional loss reserves. If the company does not complete the rigs, substantial additional losses could be incurred.