Diamond Offshore Drilling has sealed long-term charter contracts from US independent Hess for two of its newbuild deepwater drillships, while also clinching contract extensions for three of its semisubmersibles, in deals worth a combined total of US $2.4 billion.

The contractor, which also reported third quarter 2014 net income of US $53 million (down on the equivalent figure of $95 million for Q3 2013), said a subsidiary had entered into term drilling contracts with Hess for the use of its Ocean BlackRhino and Ocean BlackLion newbuilds.

The contracts are contingent upon Hess obtaining full project sanction from its partners. Once effective, the commitments for the two units are expected to generate combined total revenue of approximately $1.02 billion and represent seven years of contract drilling backlog.

The Ocean BlackLion is expected to started operations in the US Gulf in the fourth quarter of next year on a 4-year term, while the Ocean BlackRhino is expected to start work in the GoM in the fourth quarter of 2016 on a 3-year term.

All of Diamond’s newbuild units (four drillships and a harsh environment semisubmersible) are now contracted into 2019 or beyond, with all the drillships operating in the GoM.

Offshore Brazil, meanwhile, Diamond also confirmed it has received contract extensions on three ultra-deep semisubs from Petrobras that are expected to generate maximum total revenue of $1.4 billion, and represent nine years of contract drilling backlog.

The Ocean Baroness received a 3-year term extension at $310,000 per day, the Ocean Courage also received a 3-year term extension at $455,000/d (plus a $112,000 uplift in dayrate for a period of 390 days, related to the early termination of the Ocean Concord), while the Ocean Valor received another 3-year term extension also at $455,000/d.

Diamond’s total revenue backlog now stands at $8.2 billion.

Offshore