Contracts terminated for two Gulf of Mexico drillships

Freeport-McMoRan Oil & Gas LLC (FMOG) and its parent company Freeport-McMoRan Inc. have agreed with drilling contractor Noble Corp. PLC to cancel contracts for the Noble Sam Croft and Noble Tom Madden drillships.

Noble Sam Croft was scheduled to terminate in July 2017 and Noble Tom Madden in November 2017. The firms had been engaged in discussions since late last year about restructuring the contracts (OGJ Online, Dec. 18, 2015).

The rigs’ Gulf of Mexico operations will cease “as soon as practicable,” said Noble Corp., which will receive $540 million and potential further contingent payments from Freeport of $25 million and $50 million, respectively, depending upon the average price of oil over a 12-month period.

Noble Corp. said it also expects to realize more than $100 million in direct cost savings as a result of the contract terminations through crew reductions and stacking procedures.

Freeport recently announced a restructuring of its oil and gas business (OGJ Online, Apr. 6, 2016). As disclosed in Freeport’s public filings, FMOG has substantial debt and has been negatively impacted by the crash in oil prices.

“Given the financial headwinds facing our client, we are pleased to have resolved this matter in this manner,” said David W. Williams, Noble Corp. chairman, president, and chief executive officer.

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...