Seadrill Partners LLC announces today that as part of a settlement agreement with it has agreed to non-payment for 37 days during the recent mobilization period as a result of the time required for the ultra-deepwater harsh environment semi-submersible West Aquarius to complete modifications and repairs in order to meet the regulatory requirements for operations in Canadian waters and for the operator to receive authorization from the Canadian authorities to commence operation.
This loss will negatively impact third quarter results.
In conjunction, it is negotiating an 18 month contract extension thereby extending the operations for the rig off the east coast of Canada until April 2017. The new contract, which will be subject to required approvals by the joint interest owners, is expected to be executed by November 30, 2013.
The total revenue potential for the extension is estimated to be approximately US$337 million. This extension will increase Seadrill Partners average contract term, as at September 30, 2013, from 3.5 years to 3.8 years and increases contracted backlog from US$2.6 billion to US$2.9 billion. It will also increase potential future distribution capacity as a function of an increased day rate.
Press Release, October 11, 2013