Hamilton,
Bermuda, April 11, 2017 - North Atlantic Drilling Ltd
("North Atlantic" or "the Company") has secured 10-year contract
awards for the jack-ups West Elara and West Linus with
ConocoPhillips Skandinavia AS ("ConocoPhillips") for work in the
Greater Ekofisk Area. The total additional backlog for the new
contract awards is estimated at $1.4 billion excluding performance
bonuses.
As part of the agreement, the
Company has agreed to a dayrate adjustment on the existing West
Linus contract effective from April 2017, resulting in a $58
million reduction in current backlog.
The new West Elara contract which
is expected to commence in October 2017 includes a period of fixed
dayrates until March 2020 and contributes approximately $160
million of contract backlog. A market indexed rate is applicable
thereafter until October 2027 which the Company believes will
contribute an estimated $530 million of contract backlog.
The contract on West Linus has
been extended from May 2019 until the end of 2028 at a market
indexed dayrate, which the Company believes will contribute an
estimated $706 million of contract backlog.
The backlog estimate indicated for
the market indexed rate period for each rig is based on the third
party dayrate assumptions presented in the Seadrill Limited release
dated January 31, 2017 and includes an agreed percentage discount.
The estimates are subject to changes based on market
conditions.
The awards are subject to
ConocoPhillips receiving partner approvals for the contracts.
FORWARD LOOKING STATEMENTS
This news release includes
forward-looking statements. Such statements are generally not
historical in nature, and specifically include statements about the
Company's plans, strategies, business prospects, changes and trends
in its business and the markets in which it operates. These
statements are made based upon management's current plans,
expectations, assumptions and beliefs concerning future events
impacting the Company and therefore involve a number of risks,
uncertainties and assumptions that could cause actual results to
differ materially from those expressed or implied in the
forward-looking statements, which speak only as at the date of this
news release. Important factors that could cause actual results to
differ materially from those in the forward-looking statements
include, but are not limited to offshore drilling market conditions
including supply and demand, day rates, customer drilling programs
and effects of new rigs on the market, contract awards and rig
mobilizations, contract backlog, dry-docking and other costs of
maintenance of the drilling rigs in the Company's fleet, the cost
and timing of shipyard and other capital projects, the performance
of the drilling rigs in the Company's fleet, delay in payment or
disputes with customers, our ability to successfully employ our
drilling units, procure or have access to financing, ability to
comply with loan covenants, liquidity and adequacy of cash flow
from operations, fluctuations in the international price of oil,
international financial market conditions changes in governmental
regulations that affect the Company or the operations of the
Company's fleet, increased competition in the offshore drilling
industry, and general economic, political and business conditions
globally and our ability to negotiate and complete a comprehensive
restructuring, either on a consensual basis or otherwise.
Consequently, no forward-looking statement can be guaranteed. When
considering these forward-looking statements, you should keep in
mind the risks described from time to time in the Company's filings
with the SEC, including its Annual Report on Form 20-F. The Company
undertakes no obligation to update any forward-looking statements
to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not
possible for us to predict all of these factors. Further, the
Company cannot assess the impact of each such factors on its
business or the extent to which any factor, or combination of
factors, may cause actual results to be materially different from
those contained in any forward-looking statement.
This information is subject to the
disclosure requirements pursuant to section 5-12 of the Norwegian
Securities Trading Act.