Big thanks to Barry lObama for fucking us just a little bit more than we've already been fucked.
Exodus of deepwater rigs from GOM is underway
The exodus of deepwater rigs from the Gulf of Mexico as a result of the Obama administration moratorium on deepwater drilling is underway.
Diamond Offshore Drilling, Inc. (NYSE:DO) yesterday announced that it has entered into a term contract ending June 30, 2011, plus option, with Burullus Gas Company S.A.E. that will immediately mobilize the Ocean Endeavor from the Gulf Of Mexico (GOM) to Egypt.
Diamond Offshore President and CEO, Larry Dickerson, noted, "With new contracting severely restricted in the GOM as a result of the uncertainties surrounding the offshore drilling moratorium, we are actively seeking international opportunities to keep our rigs fully employed. This new contract for the Endeavor will help us preserve backlog, and will allow the previous operator of the rig to satisfy its contractual obligations which extended until June 30, 2011. We greatly regret the loss of U.S. jobs that will result from this rig relocation."
The new contract, combined with a $31 million early termination fee paid by the previous operator of the rig, is expected to generate combined maximum total revenue of approximately $100 million.
The Ocean Endeavour is a semisubmersible nominally capable of drilling in 10,000 ft water depths. It is one of several rigs on which Diamond Offshore customers have sought to exercise force majeur clauses in their contracts.
Diamond Offshore gave the details of the rigs and contracts in question in an 8K filing with the SEC last week.