| 03 Sep 2010 |
|
Aramco, Rowan ink contracts for two US Gulf rigs
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BANGALORE/NEW YORK - Rowan Cos Inc signed contracts with Saudi AramcoSaudi Aramco
for two of its Gulf of Mexico-based rigs for higher dayrates, on track with its plans to move those rigs overseas, sending its shares up 9 percent.In July, the offshore rig contractor said it was in talks to move two high-end shallow-water rigs out of the Gulf of Mexico due to demand elsewhere.
The rigs, Bob Palmer and Ralph Coffman, are expected to move out of the US Gulf during the fourth quarter of 2010, to work in the Middle East, the company said in a filing with US regulators.
Bob Palmer was signed for a dayrate of mid 270,000s, more than double of what it was signed for with its earlier operator. Ralph Coffman was signed for low 220,000s, about 20 percent rise from its prior contract.
"It's a very strong dayrate, compared to where the current dayrates are...," Howard Weil analyst David Wilson said.
The company said the contract was for three years, and it will commence in late second quarter of 2011.
In July, the company received a notice of declaration of force majeure from the last operator of the Bob Palmer, following which the rig was idle for 13 days during the month.
Shares of the company rose to $28.05 Wednesday noon on the New York Stock Exchange. They have outperformed the S&P Oil & Gas Drilling Sub-Industry Index by 27 percent year to date.
Meanwhile, oil prices ended higher Thursday after an initial retreat as investors put a positive spin on reports about jobs, manufacturing and home sales.
Benchmark oil for October delivery rose $1.11 to settle at $75.02 a barrel on the New York Mercantile Exchange. Prices dropped as low as $73.11 earlier in the session.
In London, Brent crude rose 58 cents to settle at $76.93 a barrel on the ICE Futures exchange.
Natural gas for October delivery lost 1.1 cents to settle at $3.751 per 1,000 cubic feet.
In other Nymex trading in October contracts, heating oil added 2.12 cents to settle at $2.0623 a gallon.
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