Marshall DeLuca
Houston
Contractors face more cancellations
With oil prices at record lows and operators cutting budgets and projects, the last thing rig contractors want to see are contract cancellations. Recently, five of the largest contractors - Diamond, Global Marine, R&B Falcon, Sedco Forex, and Transocean - experienced contract cancellations. Some were canceled out by newer contracts. The record thus far:
Diamond Offshore contracted for the Ocean Alliance and terminated the Ocean Clipper.to five years with three one-year extensions at which the day rate would range between $189,200 and $199,200, depending upon when the primary term is extended. R&B has also signed a $300 million contract with Hyundai Heavy Industries of South Korea for the construction of the rig. Delivery is scheduled for November 2000.
need of extensive and costly upgrading. The company has decided to seek a more modern and efficient rig in order to reduce the costs of the program. Transocean intends to submit a bid. The termination is contingent upon payment from Terra Nova to Transocean of $40 million.
Nabors, Pool merge
Following along the new mega-merger trend of operators, drilling contractors have thrown a second hat in the merger ring in recent months. Fresh off news of the completion of the R&B Falcon-Cliffs Drilling merger, Nabors Industries and Pool Energy Services have finally come to terms on their long-awaited merger. The boards of both companies unanimously agreed to approve the merger for a tax-free, stock-for-stock transaction. Pool shareholders will receive 1.025 shares of Nabors common stock for each share of Pool that they own, for a total value of $518 million. Nabors began publicly courting Pool in October with a proposed offer of a combination of stock and cash. Pool subsequently rejected the offer in anticipation of a sweetened deal, which they obviously were given. The combined company will re-enforce Nabors position in the drilling market. Nabors already holds the title as the largest land driller in North America, which will be further enhanced with the acquisition, as well as increase the company's offshore position from 36 rigs to 60, both domestically and internationally.Construction update
- Friede Goldman Offshore has taken possession of the second bare-deck hull from Ocean Rig. The hull for the Bingo 9000-2 semi recently arrived at the yard in Pasacagoula, Mississippi, the location of the company's first semi, Bingo 9000-1, currently under construction. The hull was transported in sixty days from the Dalian New Shipyard in China in accordance with schedule. Pre-fabrication of the deck modules has already been completed at the yard. Delivery of the completed rig is expected in December. The first Bingo is set for delivery in August.
- Pride International has entered into loan agreements worth $240 million with a Japanese training company for the long-term financing of the construction of two semisubmersibles: Amethyst 6 and Amethyst 7. The rigs are currently under construction in South Korea and will work for Petrobras for seven years upon completion. Pride also announced that the refurbishment of the Pride Kansas jackup is now completed and the rig is mobilizing for work under a long-term contract in the Gulf of Mexico with Chevron.
The contract on the jackup was amended to extend from two to four years at a day rate of $30,000.
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