USA: Hercules Completes Acquisition of Ocean Columbia Jack-up Rig

Hercules Offshore, Inc. announced today that it has closed the previously announced acquisition of the offshore drilling rig Ocean Columbia from Diamond Offshore Drilling, Inc. for $40 million in cash.

Ocean Columbia, which will get a new name, Hercules 266, is a LeTourneau Class 82 SD-C jack-up drilling rig registered and flagged in the Marshall Islands.

The Company also announced the execution of a contract for the dry tow transportation of the Hercules 266 from the U.S. Gulf of Mexico to a shipyard in the Middle East in the second quarter of 2012, where the rig will undergo capital upgrade and contract preparation work, before commencing on a three year contract with Saudi Aramco. Over this three-year period, the Company expects to generate total revenues of approximately $160.0 million, including a lump-sum mobilization fee.

John Rynd, Chief Executive Officer and President stated, “By closing early on the rig acquisition and quickly securing access to a dry tow vessel, we gain greater operational flexibility to perform the required upgrade work and deliver the rig on a timely basis. Our current operations for Saudi Aramco with the Hercules 261 and Hercules 262 provide us with significant experience at the shipyard in dealing with Saudi Aramco’s high standards. Based on this experience, we are confident in contract commencement by late 2012. “

Diamond Offshore’s CEO, Larry Dickerson, last week said “Hercules approached us with an offer to acquire the Ocean Columbia, and we found the terms to be compelling. We are principally a floater company, and this transaction will further augment our funds for potential investments in deepwater and ultra-deepwater assets.”

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Offshore Energy Today Staff, March 29, 2012