Above Average Day-Rates in New GOM Deals

Offshore drilling contractors Atwood Oceanics and Ensco Monday announced new drilling contracts in the Gulf of Mexico. Recently, U.S. regulators started approving drilling plans in the GOM following the offshore drilling moratorium that was placed after Deepwater Horizon incident.

Hess awarded Atwood a drilling services contract for its ultra-deepwater semisub Atwood Condor. The contract has a firm duration of 21 months with options for two one-year extensions. Currently under construction at Jurong Shipyard, the rig is expected to arrive in the GOM in September 2012.

Meanwhile, Ensco has entered into a shared drilling contract with Anadarko, Apache Deepwater and Noble Energy for the Ensco 8505. The contract term is for two years/rotations per operator, whichever is longer, in the GOM. Contract commencement is scheduled for 2Q 2012 upon arrival of the semisub from the Keppel FELS shipyard.

Dayrates for both the Ensco 8505 and Atwood Condor were above the average $455k/day rate for semisubs in the GOM. Atwood's total revenue backlog increased by $329 million, excluding approx. $32MM in mobilization revenue, while Ensco reported a day rate of $475k/day plus cost adjustments.

According to Rigzone Data Services, rig demand in the region continues moving forward but remains well below the high-water mark set by a semisub in 2008 for $580/day.


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