In this article, we’ll look at some prominent new contracts for offshore drilling companies as well as contract terminations.
Pacific Drilling (PACD) signed a contract with Hyperdynamics to drill the offshore Guinea prospect. Pacific Drilling’s drillship, the Pacific Bora, should begin drilling in 2Q17.
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On December 29, 2016, Seadrill (SDRL) announced that it signed a three-year contract extension with Saudi Aramco for the AOD III jack-up drilling rig. The contract will expire in December 2019. According to the Reuters calculation, the day rate for the contract is $102,740 per day compared with a current rate of $114,000 per day. At the start of December, Seadrill Partners (SDLP) received a notice of termination from Tullow Ghana for the West Leo drilling contract.
Atwood Oceanics (ATW) secured a new one-well drilling contract with Woodside Energy for its ultra-deepwater rig, the Atwood Osprey. The contract will commence from May 24–July 7, 2017. The duration of the contract is approximately 130 days. The day rate for the contract is $185,000 per day.
Taking a look at contract updates for December, we can see that the offshore drilling industry (OIH) is still fighting with contract terminations. Day rates, which have already plunged to low levels, are still declining. Short-term contracts are more common in this industry downturn.