Ocean Rig UDW Inc. has finalised another significant drilling contract with French operator Total, signing definitive documentation with Total E&P Congo for its ultra-deepwater drillship Ocean Rig Apollo.

The contractor said that, following a previously announced Letter of Award, the Ocean Rig Apollo will carry out a three-year drilling campaign offshore West Africa, with an estimated backlog of approximately US $677 million. It is expected to start work in the first quarter of 2015.

Last month the company also entered into a drilling contract with Total E&P Angola for a five-well program (minimum of 275 days) for its ultra-deep drillship Ocean Rig Skyros for drilling offshore West Africa, with an estimated backlog of approximately $190 million (see DI, 1 August 2013, page 3). The Ocean Rig Skyros is expected to start the contract upon delivery from the ship- yard in November 2013.

Also last month Ocean Rig received a Letter of Award for the Ocean Rig Skyros, from an as yet unnamed major oil company. The Letter of Award was for a six-year contract for drilling offshore West Africa, with an estimated backlog of approximately $1.3 billion. That contract is expected to commence in direct continuation of the previous contract for the Ocean Rig Skyros with Total E&P Angola before the first quarter of 2015.

Ocean Rig itself reported net income for the second quarter of 2013 of $38.8 million, compared to a net loss of $2.8 million in Q2 2012, and an adjusted EBITDA of $115.8 million for the quarter ($101.1 million in Q2 2012).

George Economou, Chairman and CEO, said: “We are very pleased with the operating performance of our fleet in the second quarter. Although our results were partially affected by the planned mobilisation of three of our units, the improvement in fleet operating efficiency (96% average fleet-wide) and cost control initiatives have resulted in a strong quarter for our company.”

He added that with the LoA for the Ocean Rig Skyros, the company’s fleet was effectively fully contracted through 2014. “I believe that our current contract backlog of approximately $6 billion provides us with a solid foundation for the years to come. We believe that the ultra-deepwater drilling market for high quality assets will remain strong in the foreseeable future as indicated by the high level of demand we are continuing to witness.

“After multiple large offshore discoveries, the industry moves into the development stage of the well cycle, which is expected to result in more technically complex projects and longer term contracts. We are excited about the future employment prospects of our high quality homogeneous fleet and believe we are optimally positioned in the UDW market.”

-Ocean Rig has also confirmed that it has reached settlement with Cairn Energy out of court to receive compensation amounting to $5 million against an outstanding receivable of $11 million. As a result, during Q2 2013, Ocean Rig wrote off $6 million. This agreement is subject to definitive documentation, it added.