Petrobras has agreed an early terminatation on its contract for Sevan Drilling's cylindrical drilling rig, the Sevan Driller.
The two firms also agreed to reduce rates on a second Sevan drilling rig, the Sevan Brasil, also on contract to Petrobras, to US$250,000/d from 26 February 2016 to the end of the contract period, July 2018.
Sevan Drilling said the move was a preferred alternative to potentially have both contracts terminated and exposing it to "a legal challenge with an uncertain outcome."
The Sevan Driller has also found alternative work, namely, a well intervention contract with Shell in Brazil for 60 days, with two 30-day options, started in Q2 2016, and adding about $11 million in revenue backlog.
As of 26 February 2016, Sevan's total contracted revenue backlog is estimated at $509 million, including the extension of the Sevan Louisiana contract amended in November 2014.
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