Atwood Oceanics Receives Notice of Force Majeure on its’ Offshore Egypt Drilling Rig

ATWOOD OCEANICS, INC., a Houston-based international drilling contractor , announced that, on January 29, 2011, due to the civil unrest that has occurred in Egypt, its’ customer, RWE Dea Nile GmbH gave notice to Alpha Offshore Services Company, a wholly-owned subsidiary of Atwood Oceanics, Inc., of a force majeure event affecting the operations of the Atwood Aurora which is presently operating offshore Egypt in the Mediterranean Sea.

Provisions of the drilling contract provide for a day rate of 70% of the current operating rate of $133,000 during the first 15 days of the force majeure event. Thereafter, 50% of the operating rate will apply, up to remediation of the force majeure event or contract termination, whichever occurs first. The drilling contract can be terminated by either party after a 30 day period of a continuing force majeure event.

“We have secured the well and are in the process of halting offshore operations.”

Force majeure (French for “superior force”), also known as cas fortuit (French) or casus fortuitus (Latin), is a common clause in contracts which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term “act of God” (e.g., flooding, earthquake, volcanic eruption), prevents one or both parties from fulfilling their obligations under the contract. However, force majeure is not intended to excuse negligence or other malfeasance of a party, as where non-performance is caused by the usual and natural consequences of external forces (e.g., predicted rain stops an outdoor event), or where the intervening circumstances are specifically contemplated.

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Source:Atwood  , February  1, 2011;