UK: Xcite Energy Renegotiates Rowan Jack-Up Contract

UK: Xcite Energy Renegotiates Rowan Jack-up Contract

Xcite Energy, has negotiated an amendment to its rig contract with British American Offshore Limited, a subsidiary of Rowan Companies Inc.

The amendment provides additional flexibility around timing of the provision of a heavy duty, harsh environment jack up drilling unit, which will better suit the revised work programme as anticipated for Phase 1B of the first  phase  development of the Bentley field.

The original contract provided for a fixed 240 day initial period for the Phase 1A work programme, commencing from arrival of the rig at the Bentley field location, followed by six consecutive one year extension options. The first one year  extension option was required to be exercised by Xcite Energy no later than 120 days after the start of the 240 day initial period.

The contract amendment provides Xcite Energy with the ability to shorten the 240 day initial period for Phase 1A, thereby reducing its financial commitment if completion of the work programme is ahead of schedule. It also provides the ability at any time up to 240 days after the end of Phase 1A in which to re-call an appropriate rig from the Rowan fleet for Phase 1B of the Bentley field development (the “Call Option”). The amendment further provides a flexible delivery window of between 14 and 20 months from the exercise of the Call Option for the selected rig, to be determined in consultation with Rowan to match the construction and installation of facilities for Phase 1B of the Bentley field development.

Commenting on today’s announcement Richard Smith, CEO, said: “This is a very good outcome for the Company allowing us to maintain our principal objective of using a suitable jack-up unit for the first phase of the Bentley development. This amendment provides greater flexibility to manage the timing and costs of our revised work programme for Phase 1B.”

[mappress]
Offshore Energy Today Staff, February 3, 2012