HOUSTON (Dow Jones)-Diamond Offshore Drilling Inc. (DO) said Wednesday it has agreed to sell a shallow water drilling rig, the Ocean Shield, to Ensco PLC (ESV) for $186 million in cash and that it would possibly invest those funds in deepwater drilling assets.
The sale of the Houston-based drilling contractor's Ocean Shield rig is a sign drilling contractors are still interested in investing in deepwater, despite a more cloudy future for drilling in deep ocean waters created by the ongoing oil spill in the U.S. Gulf of Mexico. Late last month, Noble Corp. (NE) agreed to buy closely held offshore driller FDR Holdings Ltd. for $2.16 billion to strengthen its position in the U.S. Gulf--a market squeezed by a contested moratorium on deepwater exploration.
The Ocean Shield is currently working under a term contract for Apache Corp. (APA) in Australia. Ensco will assume the contract, Diamond Offshore said. The rig, known as a jackup, can drill in water depths of up to 350 feet.
Shares of Diamond Offshore recently traded 0.5% higher at $63.33 apiece, while Ensco's American depositary shares increased 1.7% to $41.04.
-By Jason Womack, Dow Jones Newswires; 713-547-9201; email@example.com