Diamond Offshore Drilling, Inc. announced that a subsidiary of the Company has agreed to suspend a Gulf of Mexico (GOM) contract and has entered into a new multi-well international commitment with a subsidiary of Murphy Exploration and Production Company that will result in the relocation of the dynamically positioned, deepwater drilling rig Ocean Confidence to the Republic of Congo.
The rig departed the GOM over the weekend and is expected to arrive on location offshore Africa within approximately 60 days.
Diamond Offshore President and CEO, Larry Dickerson, noted, “As the uncertainty about continued deepwater drilling in the GOM persists, we must consider alternatives that allow our deepwater assets to remain employed. The contract we suspended with Murphy has been restructured into a one-year commitment in the GOM that is expected to recommence when our customer is satisfied that it can obtain the necessary permits and can meet any new regulatory requirements.”
The new international contract is a three-well commitment, plus an option for additional work, and includes an obligation for the customer to mobilize the rig to and from the Republic of Congo. The remaining one-year Gulf of Mexico commitment and new international commitment are expected to generate combined maximum total revenue of approximately $234 million.
Diamond Offshore provides contract drilling services to the energy industry around the globe and is a leader in deepwater drilling. Maximum contract revenue as stated above assumes 100% rig utilization. Generally, rig utilization rates approach 95-98% during contracted periods; however, utilization rates can be adversely impacted by additional downtime due to unscheduled repairs, maintenance and weather.
Source: Diamond Offshore,July 13, 2010;