Stone Energy cancels deepwater rig contract
Stone Energy Corp. has terminated a deepwater drilling rig contract with Ensco that was originally set to expire in August 2017.
The two companies agreed to end the long-term contract for a total consideration of $20 million, about $5 million of the total amount was a deposit previously provided to Ensco prior to the drilling services contract.
Stone originally contractedENSCO 8503 in October 2014 for a multi-year campaign in the Gulf of Mexico.
The company also agreed to provide Ensco the opportunity to perform certain drilling services beginning before Dec. 31, 2019, and Stone paid Ensco a $5 million deposit to be used as a credit against future drilling activities initiated before March 31, 2017, subject to extension in certain circumstances.
Stone’s Chairman, President, and CEO David Welch stated: “The termination of the Ensco contract eliminates a long-term obligation, which provides Stone with additional financial flexibility” and thanked thedrilling contractor for its “willingness to work with Stone during this difficult period of sustained low commodity prices.”
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