Houston-headquartered drilling contractor Rowan says it has reached an settlement with considered one of its prospects for the early termination of the drilling contract for the ultra-deepwater drillship Rowan Relentless. 

The contract with Freeport-McMoRan was scheduled to scheduled to terminate in June 2017, however on account of lack of labor and a latest restructuring a of Freeport’s oil and gasoline enterprise brought on by the downturn in oil costs, the 2 corporations have labored out a deal to finish terminate the contract early. 

The settlement offers that the drilling contract can be terminated instantly, and Freeport can pay Rowan $215 million in money to settle excellent receivables and early termination. Rowan says it might additionally obtain extra contingent funds from Freeport within the quantity of $10 million and $20 million, respectively, relying on the typical value of oil over a 12-month interval.

Rowan now says it expects to scale back its prices for the Rowan Relentless by environment friendly heat stacking of the rig.

“I am satisfied with this resolution given FMOG did not have any ongoing work for theRowan Relentless,” mentioned Tom Burke, President & CEO of Rowan, commented. “This accelerated payment provides additional liquidity to further strengthen our balance sheet and affords Rowan added flexibility as we review opportunities in this down market. The Rowan Relentless, our fourth high-specification ultra-deepwater drillship, had outstanding operational performance on this contract, delivering safe, reliable and efficient operations.”

Rowan’s fleet consists of 31 cellular offshore drilling models, comprised of 27 jack-up rigs and 4 ultra-deepwater drillships. The three different drillships are all below contract within the Gulf of Mexico for various prospects till April 2017, October 2018 and February 2018, respectively. 

Rowan Relentless was delivered in Q3 2015 and instantly commenced the two-year contract with Freeport McMoran.