Saudi Aramco slashes dayrates for three Hercules Offshore’s jack-ups

After Hercules Offshore yesterday said that Saudi Aramco would slash the dayrates for three Hercules Offshore’s jack-up rigs, the company’s has issued a separate statement providing more details.

The Saudi Arabian oil company yesterday withdrew its previously issued contract termination for Hercules 261 jack-up rig, but in turn decided to significantly reduce the rig dayrates for Hercules 261, Hercules 262 and Hercules 266.

In an updated statement, Hercules Offshore said it had recieved a notice from Saudi Aramco reducing the dayrates under its five year contracts for the Hercules 261 and Hercules 262 to $67,000 per day. The reduced dayrates will apply from January 1, 2015, through December 31, 2016.

The dayrate for the Hercules 266 has been reduced to $67,000 per day for the remaining term of its contract.

As these dayrate concessions are effective retroactive to January 1, 2015, Hercules Offshore is required to make an adjustment to its revenues for amounts earned under these contracts during the period from January 1, 2015, through March 31, 2015.

According to the company, this adjustment of around $13 million will be recorded in the second quarter of 2015.

Offshore Energy Today Staff

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