Rowan: Two Jack-Up Rig Contracts Secured

Rowan Companies a Houston-headquartered drilling contractor, has secured contracts for two of its jack-up drilling rigs. Also, the off rate time for three rigs has increased.

In its latest fleet status report, the company said that the contracts have been awarded for the “Bob Keller” and “EXL I” drilling units.

Bob Keller has been warded a 10-year extension with Saudi Aramco in the Middle East starting in May 2014 at $177,500 per day, above its previous day rate at $127,500. Previously scheduled 60 days off rate time for customer-required equipment upgrades expected to occur 4Q 2014.

Malaysia’s oil company Petronas has awardeda one-year contract for the EXL I rig in Indonesia. The rig’s contract started at the end of October 2013 at $160,000 per day, in line with the previous day rate.

Out of service days

Rowan further said that Gorilla VII has increased 4Q 2013 off rate time by 19 days to 57 days for leg repairs and weather delays. Rig is expected to return to service at the beginning of December 2013. Operating costs will be expensed during this period. Incremental third party repair cost will be expensed and is expected to total approximately $2.5 million in 4Q 2013, above prior guidance of $1.9 million.

Also, Gorilla VI has increased 1Q 2014 off rate time by 46 days to 59 days for repairs, upgrades and inspections. Rig is expected to return to service at the beginning of March 2014.
Rowan Viking has increased 1Q/2Q 2014 off rate time by 15 days to 120 days for inspections and equipment modifications expected to start at the end of February 2014 instead of mid-February 2014.

“The Company continues to expect out of service time to be 9% and 10% of available rig days for the fourth quarter of 2013 and full year 2013, respectively. For the full year 2014 the Company continues to expect jack-up out of service time to be between 7% and 9% of available rig days. The Company does not expect any out of service days in 2014 for the drillships, and is expecting operational downtime to be less than 5% after some break-in period, when operational downtime could be somewhat higher,” Rowan said in a press release.
Out-of-service days include days for which no revenues are recognized other than operational downtime and cold-stacked days. The Company may be compensated for certain out-of-service days, such as for shipyard stays or for transit periods preceding a contract. However, recognition of any such compensation received is deferred and recognized over the period of drilling operations. Operational downtime is when a rig is under contract and unable to conduct planned operations due to equipment breakdowns or procedural failures. No operational downtime is included in projected out-of-service days, but the company estimates operational downtime to account for approximately 2.5% of in-service days in current and future quarters.

November 22, 2013

 

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