Atlantic Drilling Signs 10-Year Contracts

North Atlantic Drilling an offshore drilling company, said early Tuesday it secured 10-year contract awards with ConocoPhillips’ (COP) ConocoPhillips Skandinavia worth an estimated $1.4 billion for work in the Greater Ekofisk Area, located in the southern part of the North Sea. Shares of North Atlantic Drilling are up 112% in pre-market trading. 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 begin in October, 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.

By Bucky Rini