$360M Deal Boost for Diamond

Based in Houston, Diamond Offshore Drilling has secured a contract with Serica Energy for the use of one of its semi-submersible rigs, along with an extension of its drillship services with BP.

The agreement with Serica Energy involves the deployment of the Ocean Patriot, a semi-submersible jack-up rig constructed in 1983, for executing two plug and abandonment operations in the British sector of the North Sea.

This operation is scheduled to commence in March 2024 and is expected to last about 60 days. The deal adds over $10 million to the company's backlog, not including the costs of mobilization.

In a recent development, Diamond Offshore also acquired a significant contract for the Ocean Patriot from TAQA Bratani Limited for 35 wells dedicated to plug and abandonment tasks in the UK, with an anticipated three-year duration. This agreement includes the option for an additional 17 priced wells and is expected to extend for roughly 12 months.

Furthermore, Diamond Offshore has been granted a two-year extension for its contract with a BP subsidiary in the US Gulf of Mexico for the Ocean BlackLion, a drillship launched in 2015. This extension is set to begin in September 2024, immediately following the current contract's conclusion, and is valued at approximately $350 million in added backlog.

As per the latest fleet status report from the company, the Ocean BlackLion has been engaged in operations for BP since September 2022. With the inclusion of the new agreements for the Ocean Patriot and the extensions for both the Ocean BlackRhino and Ocean BlackLion, Diamond Offshore's total backlog is now estimated at $1.66 billion.