Offshore Drilling Companies Report Boost in US Gulf Contracts
December 16 2010 - 2:40PM
Dow Jones News
Offshore drilling companies Hercules Offshore Inc. (HERO) and
Ensco PLC ADS (ESV) reported an uptick in contracts and day rates
for rigs in the Gulf of Mexico in fleet status reports this
week.
Each of the contracts relates to jobs in water depths below 500
feet, and much of the new work has been commissioned by Chevron
Corp. (CVX), according to the reports released late Wednesday.
Hercules announced six-month extensions to three contracts with
Chevron as well as rate increases that push the average price the
San Ramon, Calif., oil giant will pay Hercules for each rig higher
by as much as $6,000 per day. Hercules, of Houston, also reported
shorter-term contracts for four other Gulf of Mexico rigs with
other energy producers.
Ensco said contracts for two of its shallow-water Gulf of Mexico
rigs were extended into July by Chevron. Day rates for the Ensco 82
and Ensco 68 are set to increase on Jan. 11 to the mid $60,000s and
mid $90,000s from the mid $50,000s and high $80,000s,
respectively.
"Probably the most surprising development in both reports is the
fact that contractors have been able to modestly push pricing in
the gulf of Mexico despite the uncertain permitting environment,"
analysts with Jefferies & Co. wrote in a research note.
Shares of Hercules recently traded up 5.9%, at $3.03. Ensco's
stock rose 1.9% to $51.98.
-By Ryan Dezember, Dow Jones Newswires; 713-547-9208;
ryan.dezember@dowjones.com