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Hercules Offshore to Provide Jackup Rigs to Saudi Aramco

Posted on: Monday, 24 March 2008, 09:00 CDT

Offshore services provider Hercules Offshore has signed contracts to provide major oil producer Saudi Aramco with two jackup drilling rigs for three-year terms plus one-year fixed price options at the same rate.

The Hercules 300 and Hercules 261, currently known as the High Island I and High Island VIII, respectively, will fulfill the contract commitments.

The Hercules 300 was acquired on March 14, 2008, and the closing on the purchase of the Hercules 261 is expected upon the completion of its current contract commitment in May 2008.

Hercules Offshore is negotiating contracts, which are expected to be executed shortly, for the dry tow transportation of the rigs, from the US Gulf of Mexico to a shipyard in the Middle East in the second quarter of 2008, where they will commence 90 to 120 days of contract preparation work.

The contracts with Saudi Aramco are expected to commence on September 30, 2008. Potential revenue generated over the three-year contracts totals approximately $151 million for the Hercules 300 and approximately $140 million for the Hercules 261, which excludes payment to the company of reimbursable expenses and a total of approximately $25 million for the mobilization of both rigs.

Source: Datamonitor

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