Irish independent Tullow Oil has exercised a contractual option worth approximately US $450m to extend its contract to use Seadrill’s ultra-deepwater semisubmersible rig West Leo by two years from May 2016 to May 2018.

The rig is expected to carry out operations offshore West Africa for the operator until the end of its contract.

The potential contract revenue of $450m is based on 97% utilisation and includes a performance bonus arrangement. This brings the total estimated contract value for the rig to $1.13 billion, said Bermuda-based Seadrill.

In line with the omnibus agreement terms and conditions between Seadrill and Seadrill Partners, Seadrill is obligated to offer the West Leo to Seadrill Partners at a fair market price.