Bristow Renegotiates Two Existing Nigerian Contracts
Bristow Group has renegotiated two different contracts with one major customer in Nigeria to extend the term of the contracts, which include rate increases. In addition, another major customer in Nigeria has elected to extend its current contract, and the extension period includes a rate increase. Total estimated revenue for the three contracts over the extension periods is approximately $100 million.
The agreement with the first customer includes one contract for helicopters and one contract for fixed-wing aircraft. The extension period for the helicopter contract is from October 2007 through September 2009 and calls for rate increases retroactive to April 1, 2007. Bristow expects to recognize the retroactive rate increases and resulting revenue of approximately $2 million for the June 30, 2007 quarter in its September 30, 2007 quarterly results. The helicopter agreement also includes an additional rate escalation effective October 2008.
The agreement with the first customer for the fixed-wing aircraft extends from August 2007 through December 2008 and includes rate increases effective August 2007 and January 2008.
The agreement with the second customer is for helicopters, and the extension period is from October 2007 through September 2008. This contract calls for a rate increase effective April 2008 for approximately 80% of the equipment involved.
"We expect these agreements to result in improved operating margins for our West Africa business unit and reflect our continuing effort to move this operation towards its target hurdle return rate," said William E. Chiles, President and Chief Executive Officer of Bristow Group. "We remain in negotiations with one additional customer in Nigeria, which we expect to successfully complete in the near future. We are following through on our commitment to operate in Nigeria safely, profitably and in compliance with laws and regulations."
Bristow Group Inc. is the leading provider of helicopter services to the worldwide offshore energy industry based on the number of aircraft operated. Through its subsidiaries, affiliates and joint ventures, the Company has major transportation operations in the U.S. Gulf of Mexico and the North Sea, and in most of the other major offshore oil and gas producing regions of the world, including Alaska, Australia, Mexico, Nigeria, Russia and Trinidad. Additionally, the Company is a leading provider of production management services for oil and gas production facilities in the U.S. Gulf of Mexico.
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