North Atlantic Drilling Limited (NADL), a subsidiary of Seadrill, has secured ten-year contract awards for the jack-ups West Elara and West Linus with ConocoPhillips Skandinavia for work in the Greater Ekofisk Area offshore Norway.
NADL said on Tuesday that the total additional backlog for the new contract awards is estimated at $1.4 billion excluding performance bonuses.
As part of the agreement, the company has agreed to a dayrate adjustment on the existing West Linus contract effective from April 2017, resulting in a $58 million reduction in current backlog.
The company also said that the new West Elara contract, which is expected to start in October 2017, includes a period of fixed dayrates until March 2020 and contributes approximately $160 million of contract backlog. A market indexed rate is applicable thereafter until October 2027, which will contribute an estimated $530 million of contract backlog.
The contract on West Linus has been extended from May 2019 until the end of 2028 at a market indexed dayrate, which will contribute an estimated $706 million of contract backlog.
According to the company, the backlog estimate indicated for the market indexed rate period for each rig is based on the third party dayrate assumptions presented in the Seadrill Limited release dated January 31, 2017 and includes an agreed percentage discount. The estimates are subject to changes based on market conditions.
The awards are subject to ConocoPhillips receiving partner approvals for the contracts.