ORIG seals $1bn deal

Ocean Rig has sealed a $1.3bn contract that will keep one of its newest deepwater drillships employed off Angola for six years.
The Skyros was hired by Total E&P (Angola).

The Skyros was hired by Total E&P (Angola).

In a statement the Nasdaq-quoted offshore contractor said it has firmed up a deal involving the 12,000-ft drilling depth Ocean Rig Skyros (built 2013), which was hired by an affiliate of Total.

The DryShips spinoff, which is based in Athens and Stavanger, indicated that the project is scheduled to commence in the third-quarter of next year.

When the contract started to take shape last summer the operator said it would likely begin prior to the first quarter of 2015, observers note.

The Ocean Rig Skyros was built by Samsung Heavy Industries hit the water in December of last year, according to Clarksons Shipping Intelligence Network.

The database claims the newbuilding order was placed in April of 2011 and cost the company approximately $638m in total, which is in-line with what Ocean Rig paid for the other drillships it inked at the same South Korean shipyard.

According to DryShips, which owns over 50% of Ocean Rig’s stock, its affiliate currently oversees a fleet of two semi-submersible drilling rigs and 11 ultra-deepwater drillships. Of these, it says four are still under construction.

Ocean Rig, which trades under the symbol “ORIG”, made headlines yesterday after lining up a contract for the Eirik Raude (built 2002). Today, analysts identified the counterparties behind the $165m deal as Premier Oil and Noble Energy.

In a note to clients Darrin Hicks and Jonathan Chappell of Evercore Partners pointed out that the consortium has options to drill additional wells, which means the charterers may hang on to the semi-submersible for longer than initially expected.

“Although the short-term contract rate was below our estimates, from a utilization perspective, we would view extended employment of the Eirik Raude at or near $560k/day favorably given our expectations for a softening rate environment and the rig's increasingly challenging competitive position as a 12-year old, 5th generation semi-submersible,” they added.

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