Hercules Offshore Inc. acquired the offshore drilling rig Ben Avon from a subsidiary of KCA Deutag for US$55 million in cash, the company announced on 21 February 2013.
The Ben Avon is a LeTourneau Class 82 SD-C self-elevating drilling rig registered and flagged in Panama. Subject to completion of certain closing conditions, the Company expects the acquisition to close by late March 2013.
Hercules Offshore also signed a Letter of Agreement (LOA) for a three-year rig commitment with Cabinda Gulf Oil Company Ltd. (CABGOC) for use of the Ben Avon. Hercules expects to generate total revenue of approximately $119 million over this three-year period under the contract. Subject to the execution of a mutually agreed drilling contract, work is expected to commence by May 2013.
"We are very pleased to be able to acquire the Ben Avon and execute an LOA with CABGOC," said John T. Rynd, Chief Executive Officer and President of Hercules Offshore. "With this transaction, we continue to opportunistically expand our international presence and scale, add significant long term backlog and cash flow, and reaffirm our commitment to CABGOC, a key global client, at economics that are beneficial for all parties.
"The LOA for the Ben Avon replaces our prior contract with CABGOC for the Hercules 185, at a substantial improvement in dayrate and provides for a new full three year term. The Ben Avon is a well-maintained rig that recently completed an extensive five-year special survey. Given the good condition of the rig, and its close proximity to the drilling location, we expect to spend only minimal additional capital to get it on contract."