Aramco slashes rig day rates by 51%

Jun 03, 2015 12:00 AM

Saudi Aramco has reduced the amount it will pay Hercules Offshore for the use of its rigs, according to a Hercules company statement.

Aramco has advised Hercules Offshore that the day rates for the Hercules 261, 262 and 266 rigs will be reduced to $67,000 per day.The rate has been cut from $136,000 per day, a drop of 51%.

Aramco had threatened to cancel the remaining contracts for the rigs, but the new deal means that Hercules Offshore will continue to supply the rigs to Aramco until at least 31st December 2016.

The reduced rate will come into effect retroactively from the 1st January 2015, meaning that Hercules will need to make adjustments to its revenues for amounts earned under these contracts for Q1 2015.

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