LONDON – BP Exploration & Production Inc. has issued a notice of termination to Seadrill Partners LLC for the West Sirius semisubmersible. Seadrill Partners says the termination will become effective following the completion of the current well and demobilization, which it estimates to be by early May 2015.
As a result of the termination, Seadrill Partners’ backlog will decrease by approximately $160 million, but the company does not expect a material impact on its cash flow position over the contract period through July 2017. West Sirius will be cold-stacked.
Prior to the cancellation notice, the day rate and term for the West Sirius and West Capricorn contracts were swapped. The West Sirius day rate was decreased by $40,000, and the term was decreased by two years to expire in July 2017, while the day rate for West Capricorn was increased by $40,000 and the term was extended by two years to expire in July 2019.
Amortized payments for the West Capricorn, such as mobilization and upgrades, will continue on the original schedule, ending in July 2017. In accordance with the cancellation provisions in the West Sirius contract, Seadrill Partners will receive payments over the remaining contract term, now expiring in July 2017. Seadrill did not disclose the payment terms.