Freeport-McMoRan Oil & Gas LLC (FMOG), a unit of Freeport-McMoRan Inc., has agreed with Rowan Cos. PLC to immediately cancel the contract for the Rowan Relentless drillship, which was scheduled to terminate in June 2017.
FMOG will pay Rowan $215 million in cash to settle outstanding receivables and early termination of the contract. Rowan may also receive additional contingent payments from FMOG of $10 million and $20 million, respectively, depending on the average price of oil over a 12-month period.
Rowan expects to reduce costs by warm stacking the rig.
Freeport, which is restructuring its oil and gas business (OGJ Online, Apr. 6, 2016), also this month agreed with Noble Corp. PLC to cancel the contracts for the Noble Sam Croft and Noble Tom Madden drillships (OGJ Online, May 11, 2016).