Hercules Offshore Inc. (Nasdaq: HERO) has signed a five year drilling contract with Maersk Oil North Sea UK Ltd. for a newbuild jackup rig to be owned and operated by Hercules Offshore. Total contract value is $420 million, which includes $9 million of mobilization fees. Contract commencement is expected in mid-2016.
Hercules Offshore has also signed a rig construction contract with Jurong Shipyard Pte. Ltd., in Singapore. The rig is based on the Friede & Goldman JU-2000E design, with enhancements that will provide for greater load-bearing capabilities and operational flexibility.
The shipyard cost of the rig is estimated at $236 million. Including project management, spares, commissioning and other costs, total delivery cost is estimated at $270 million. Hercules Offshore initially pays 10% of the shipyard cost, or $24 million to JSL, followed by a second 10% payment one year after the initial payment. The final 80% of the shipyard payment is due upon delivery of the rig, estimated in April 2016.