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8-K - FORM 8-K - DIAMOND OFFSHORE DRILLING, INC. | h80642e8vk.htm |
1
Exhibit 99.1
DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
March 17, 2011
March 17, 2011
RECENT COMMITMENTS (See Body of Report For Contract Details/Date Changes and Other Information)
Ocean Summit
|
288-Day Term | |
Ocean Heritage
|
Six-Month Extension | |
Ocean Victory
|
One Well | |
Ocean Columbia
|
One Well | |
Ocean Titan
|
One Well |
Nominal | Dayrate | |||||||||||||||
Rig Name | WD* | Location | Status | Operator | Current Term | ($000s) | Start Date | Est. End Date | ||||||||
Domestic Deepwater Semisubmersibles (2) (Note 1) | ||||||||||||||||
Ocean Victory (Note 2)
|
5,500 | GOM | Current Contract | Energy XXI | one well | low 200s | early Mar. 2011 |
late Mar. 2011 | ||||||||
GOM | Contract Continuation | ATP | continue six-wells | low 560s | late Mar. 2011 | mid July 2011 | ||||||||||
GOM | Contract Continuation | ATP | balance 1-year term | low 540s | mid July 2011 | late Sept. 2011 | ||||||||||
Ocean Monarch (Note 3)
|
10,000 | GOM | Current Contract | Anadarko | cont. four-year term | low 440s | early August 2010 | mid March 2013 | ||||||||
Domestic 2nd Generation Semisubmersibles (1) (Note 1) | ||||||||||||||||
Ocean Saratoga
|
2,200 | GOM | Current Contract | Taylor | one-year extension | 200-210 | mid July 2010 | late June 2011 | ||||||||
GOM | Five Year Survey | DODI | early July 2011 | mid Aug. 2011 | ||||||||||||
Domestic Jack-ups (2) (Note 1) | ||||||||||||||||
Ocean Columbia
|
250 IC | GOM | Current Contract | Shell | prep for contract | mid 40s | early Mar. 2011 |
early April 2011 | ||||||||
GOM | Future Contract | Shell | one well | low 60s | early April 2011 |
late April 2011 | ||||||||||
Ocean Titan
|
350 IC | GOM | Current Contract | Ankor | third well extension | low 70s | mid Mar. 2011 |
late April 2011 |
Note (1). On October 12, 2010, the U.S. government lifted the ban on certain drilling activities
in the GOM.
All drilling in the GOM is now subject to compliance with enhanced safety
requirements set forth in
Notices to Lessees, or NTL, 2010-N05 and 2010-N06, both of which were implemented
during the drilling ban.
Additionally, all drilling in the GOM is required to comply with the Interim Final Rule to
Enhance Safety Measures for Energy Development on the
Outer Continental Shelf (Drilling Safety
Rule) and the Workplace Safety Rule on Safety and Environmental Management Systems,
which have
become final, as well as NTL 2010-N10 (known as the Compliance and
Review NTL). We continue to evaluate these new
measures to ensure that our rigs and equipment are in full compliance, where applicable.
Additional requirements could be forthcoming based on further recommendations by regulatory
agencies investigating the Macondo incident. We are not able to predict the
likelihood, nature or
extent of additional rulemaking.
Nor are we able to predict when the Bureau of Ocean Energy Management, Regulation
and Enforcement, or BOEMRE,
will issue drilling permits to our customers. We are not able to predict the future impact
of these events on our operations. Even with the drilling ban lifted, certain
deepwater drilling activities
remain suspended until the BOEMRE resumes its regular permitting of those activities.
Note (2). Victory In regard solely to the ATP contract, and for a minimum of the first 240
days of the initial one-year contract period, Contract Drilling Revenue is to be recognized under
normal GAAP accrual accounting at $540,000 per day, and additional contract dayrate of $20,000 is
to be recognized as interest income over applicable periods reflecting deferred payment plan. The
contract calls for $75,000 per day of the $560,000 contract dayrate to be paid on a current basis
and the remaining $485,000 per day to be paid pursuant to an overriding royalty interest structure,
as discussed in the Companys Form 8-K that was filed on June 3, 2009. Remaining days under the
initial one-year contract period will be deferred until approximately the second quarter of 2011,
when the contract provides that the rig will be utilized by the operator at a dayrate of $540,000
payable in cash.
Note (3).
Monarch In June 2010, one of our customers asserted force
majeure as a basis for its termination of the drilling
contract for the Ocean Monarch, which had a remaining term
of approximately 36 months.
The operator has also filed suit against us in U.S. District Court in
Houston seeking a declaratory judgment that its termination of the drilling contract is warranted
under the contract. We do not believe the events cited by the operator come within the definition
of force majeure under the drilling contract, and we
do not believe that the operator has the right to terminate the drilling contract on this basis.
Although we cannot predict with certainty the results of any such litigation, and there can be no
assurance as to its ultimate outcome, we intend to vigorously defend this litigation and challenge
the operators attempt to terminate the drilling contract.
2
DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
March 17, 2011
March 17, 2011
Nominal | Dayrate | |||||||||||||||
Rig Name | WD* | Location | Status | Operator | Current Term | ($000s) | Start Date | Est. End Date | ||||||||
International Semisubmersibles (25) | ||||||||||||||||
North Sea/Mediterranean |
||||||||||||||||
Ocean Nomad
|
1,200 | North Sea | Current Contract | BG Intl. | one well + 3 options | mid 240s | late Dec. 2010 | mid June 2011 | ||||||||
Ocean Guardian
|
1,500 | Falkland Is. | Current Contract | AGR/Desire/ Rockhopper |
ten firm wells | mid 240s | mid Feb. 2010 | mid April 2011 | ||||||||
Falkland Is. | Future Contract | AGR/Desire/ Rockhopper |
three firm wells + priced option | mid 260s | mid April 2011 | mid July 2011 | ||||||||||
Ocean Princess
|
1,500 | North Sea | Current Contract | Talisman | remainder Nomad contract | high 330s | late April 2010 | early April 2011 | ||||||||
North Sea | Future Contract | Talisman | 120-day additional term | mid 270s | early April 2011 | late July 2011 | ||||||||||
North Sea | Intermediate Survey | DODI | late July 2011 | early Sept. 2011 | ||||||||||||
Ocean Vanguard
|
1,500 | North Sea | Current Contract | Statoil | three-year term + unpriced option | high 340s | mid Aug. 2010 | mid June 2013 | ||||||||
Ocean Endeavor (Note 4)
|
10,000 | Egypt | Current Contract | Burullus | one-year term + priced option | mid 220s | mid July 2010 | mid July 2011 | ||||||||
Ocean Confidence
|
Angola | Current Contract | Total | assignment from Cobalt | upper 360s | early Feb. 2011 | early May 2011 | |||||||||
Angola | Future Contract | Cobalt | second firm well + option | low 360s | early May 2011 | early Oct. 2011 | ||||||||||
Mobe to GOM | DODI | early Oct. 2011 | early Dec. 2011 | |||||||||||||
GOM | Future Contract | Murphy | resume interrupted contract + unpriced option | low 510s | early Dec. 2011 | early Dec. 2012 | ||||||||||
Ocean Valiant (Note 5)
|
5,500 | Angola | Current Contract | Total | two-year term | low 620s | late Sept. 2009 | late Sept. 2011 |
Note (4). Endeavor In connection with the relocation of this rig out of the GOM pursuant
to this contract, the previous operator paid an early termination fee of $31 million in order to
satisfy certain contractual obligations.
Note (5). Valiant Dayrate subject to certain potential adjustments that are not expected to be
material.
3
DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
March 17, 2011
March 17, 2011
Nominal | Dayrate | |||||||||||||||
Rig Name | WD* | Location | Status | Operator | Current Term | ($000s) | Start Date | Est. End Date | ||||||||
Australasia |
||||||||||||||||
Ocean Patriot
|
1,500 | Australia | Current Contract | Apache | three-well extension | between 230-270 | mid Feb. 2011 | late May 2011 | ||||||||
Ocean America
|
5,500 | Australia | Interrupt Current Contract | DODI | Maintenance/mobe | late Dec. 2010 | mid March 2011 | |||||||||
Resume Current Contract | Woodside | remainder term | mid 420s | mid March 2011 | early Aug. 2012 | |||||||||||
Ocean General
|
3,000 | Vietnam | Current Contract | Premier Oil | one well + three unpriced options | low 210s | early Feb. 2011 | mid March 2011 | ||||||||
Indonesia | Future Contract | Premier Oil | two wells + unpriced option | low 240s | mid March 2011 | mid June 2011 | ||||||||||
Ocean Rover
|
8,000 | Indonesia | Future Contract | Murphy/Hess | est. six months | high 370s | mid Dec. 2010 | mid July 2011 | ||||||||
Malaysia | Resume Current Contract | Murphy | resume two-year ext. | low 450s | mid July 2010 | mid Oct. 2011 |
4
DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
March 17, 2011
March 17, 2011
Nominal | Current Term - | Dayrate | ||||||||||||||
Rig Name | WD* | Location | Status | Operator | Note (6) | ($000s) | Start Date | Est. End Date | ||||||||
Brazil |
||||||||||||||||
Ocean Ambassador
|
1,100 | Brazil | Current Contract | OGX | 3-year term | low 260s | mid Sept. 2009 | mid Sept. 2012 | ||||||||
Ocean Whittington
|
1,650 | Brazil | Current Contract | Petrobras | 5-year term (includes 50% of pot.15% bonus) | low 240s | late Jan. 2009 | late Aug. 2012 | ||||||||
Brazil | Five Year Survey | DODI | late Sept. 2011 | late Dec. 2011 | ||||||||||||
Ocean Concord
|
2,300 | Brazil | Current Contract | Petrobras | 5-year term (includes 50% of pot.15% bonus) | high 240s | early Jan. 2008 | early Jan. 2013 | ||||||||
Ocean Lexington
|
2,200 | Brazil | Current Contract | OGX | 3-year term | mid 330s | early Feb. 2010 | early Feb. 2013 | ||||||||
Ocean Yorktown
|
2,850 | Brazil | Current Contract | Petrobras | 5-year term (includes 50% of pot.15% bonus) | low 250s | mid Aug. 2008 | mid Aug. 2013 | ||||||||
Ocean Yatzy
|
3,300 | Brazil | Current Contract | Petrobras | 5-year term (includes 50% of pot.10% bonus) | mid 250s | early Oct. 2009 | early Oct. 2014 | ||||||||
Ocean Quest
|
4,000 | Brazil | Remainder term at new blended rate | OGX | revised 2-year term | low 270s | mid Feb. 2011 | late Dec. 2011 | ||||||||
Brazil | Future Contract | OGX | 1-year extension | low 250s | late Dec. 2011 | late Dec. 2012 | ||||||||||
Ocean Winner
|
4,000 | Brazil | Current Contract | Petrobras | 5-year term (includes 50% of pot.10% bonus) | mid 280s | mid Oct. 2010 | mid March 2015 | ||||||||
Ocean Worker
|
4,000 | Brazil | Current Contract | Petrobras | 6-year term (includes 50% of pot.10% bonus) | mid 280s | late Feb. 2009 | late Feb. 2015 | ||||||||
Ocean Alliance
|
5,250 | Brazil | Current Contract | Petrobras | 6-year term (includes 50% of pot.15% bonus) | mid 360s | late July 2010 | late June 2016 | ||||||||
Ocean Star
|
5,500 | Current Contract | OGX | part one of 2-year term extension | low 310s | mid Feb. 2011 | late Dec. 2011 | |||||||||
Future Contract | OGX | part two of 2-year term extension | low 270s | late Dec. 2011 | mid Feb. 2013 | |||||||||||
Ocean Baroness
|
7,000 | Brazil | Current Contract | Petrobras | three-year term (includes 50% of pot. 5% bonus) + option to convert to 5 years during 1st year of operation |
mid 280s | early Sept. 2010 | early Sept. 2013 |
Note (6) All Brazilian contracts include unpriced options
5
DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
March 17, 2011
March 17, 2011
Nominal | Dayrate | |||||||||||||||
Rig Name | WD* | Location | Status | Operator | Current Term | ($000s) | Start Date | Est. End Date | ||||||||
Brazil Cont. |
||||||||||||||||
Ocean Courage
|
10,000 | Brazil | Current Contract | Petrobras | five-year term (includes 50% of pot. 6% bonus) | 400 410 | mid Feb. 2010 | mid Feb. 2015 | ||||||||
Ocean Valor
|
10,000 | Brazil | Current Contract | Petrobras | 3-year term + option to convert to 5 years during 1st year | low 450s | late Oct. 2010 | late Oct. 2013 | ||||||||
Drillship (1) |
||||||||||||||||
Ocean Clipper
|
7,875 | Brazil | Current Contract | Petrobras | 5-year term (includes 50% of pot. 5% bonus) | mid 310s | mid Dec. 2010 | late June 2011 | ||||||||
Brazil | Upgrade for Petrobras | DODI | late June 2011 | late Sept. 2011 | ||||||||||||
Brazil | Resume Future Contract | Petrobras | 5-year term (includes 50% of pot. 5% bonus) | mid 310s | late Sept. 2011 | mid Dec. 2015 | ||||||||||
Note (6) All Brazilian contracts include unpriced options | ||||||||||||||||
International Jack-ups (7) |
||||||||||||||||
Ocean Nugget
|
300 IC | Mexico | Resume Current Contract | Pemex | 849 day term | mid 130s | early Feb. 2010 | late July 2011 | ||||||||
Mexico | Five Year Survey | DODI | mid April 2011 | mid May 2011 | ||||||||||||
Ocean Summit
|
300 IC | Mexico | Five Year Survey | DODI | late Feb. 2011 | late March 2011 | ||||||||||
Mexico | Future Contract | Pemex | 288 day term | mid 80s | late March 2011 | late Dec. 2011 | ||||||||||
Ocean Scepter
|
350 IC | Brazil | Current Contract | OGX | one-year term + unpriced option | mid 130s | early Feb. 2011 | late March 2012 | ||||||||
Ocean King
|
300 IC | Montenegro | Actively Marketing | DODI | ||||||||||||
Ocean Sovereign
|
300 IC | Thailand | Current Contract | Salamander | Six firm + three unpriced option wells | low 70s | early Feb. 2011 | mid June 2011 | ||||||||
Thailand | Five Year Survey | DODI | mid June 2011 | mid Sept. 2011 | ||||||||||||
Ocean Heritage
|
300 IC | Suez Gulf | Current Contract | SUCO | six-month extension/w right to terminate after three months | high 50s | early Feb. 2011 | early July 2011 | ||||||||
Suez Gulf | Five Year Survey | DODI | early Oct. 2011 | mid Nov. 2011 | ||||||||||||
Ocean Spur
|
300 IC | Egypt | Current Contract | WEPCO | one-year extension + unpriced option | mid 60s | late Oct. 2010 | late Oct. 2011 |
NOTES: Rig utilization rates can be adversely impacted by additional downtime due to
unscheduled repairs and maintenance, weather conditions and other factors.
On rig utilization, assume 95% for DP units, 96% for conventionally moored rigs, and 98% for
jack-ups.
An LOI is subject to customary conditions, including the execution of a definitive agreement
and as such may not result in a binding contract.
Options are un-priced and any extension of contract is subject to mutually agreeable terms &
conditions unless otherwise indicated.
Mobe revenues (if any) and mobe expenses are deferred, and generally are amortized over the
life of the contract. GOM=Gulf of Mexico.
*Nominal Water Depth Nominal water depth (in ft.) reflects the rigs current operating
water depth capability. Often, rigs are capable of drilling, or have drilled, in greater water
depths. In all cases, floating rigs are capable of working successfully at greater depths than
their nominal depth. On a case by case basis, we may achieve a greater depth capacity by
providing additional equipment.
6
DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
March 17, 2011
March 17, 2011
EXPECTED 2011 DOWNTIME 10 DAYS OR LONGER (Subject to Change*)
# Days
# Days
Rig | Q1 To Date | EST Q1 | Comments | |||||||
Shipyard 5-Year Surveys/Maintenance |
||||||||||
Nugget |
0 | 5-year survey/maintenance | ||||||||
Clipper |
0 | 5-year survey/maintenance/upgrade | ||||||||
Summit |
4 | 22 | 5-year survey/maintenance | |||||||
Saratoga |
0 | 5-year survey/maintenance | ||||||||
Whittington |
0 | 5-year survey/maintenance | ||||||||
Sovereign |
0 | 5-year survey/maintenance | ||||||||
Heritage |
0 | 5-year survey/maintenance | ||||||||
Total 5-year Surveys |
4 | 22 | ||||||||
Intermediate Surveys/Acceptance Testing/Maintenance |
||||||||||
Princess |
0 | Intermediate survey/maintenance | ||||||||
Confidence |
39 | 39 | Acceptance testing | |||||||
Total Contract Prep. |
39 | 39 | ||||||||
Contract Prep/Maintenance/Other |
||||||||||
Patriot |
0 | Maintenance | ||||||||
Scepter |
31 | 31 | Standby | |||||||
America |
58 | 75 | Maintenance | |||||||
Other Total |
89 | 106 | ||||||||
Total |
132 | 167 |
* Reflects currently planned downtime. Expect additional downtime in form of possible mobes for new jobs not yet contracted, possible acceptance testing at new jobs, and unanticipated maintenance. Survey start times may also be accelerated or delayed for various reasons. |
Does Not Include Cold or Hot Stacked Rigs (see final page for cold stacked units).
2012 ESTIMATED SURVEY DOWNTIME = 615 days
Special Surveys: Endeavor (35); Patriot (35); Yorktown (60); Quest (60); Worker (60); Star
(60); Baroness (60); Victory (50); King (35).
Intermediate Surveys/UWILD: Guardian (28); Columbia (12); Titan (12); Concord (21); Yatzy (45);
Courage (21); Valor (21).
Survey Costs: During surveys, normal opex applies, plus additional costs.
Mobe Costs:
Amortized mobe costs are generally offset by amortized mobe revenues.
7
DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
March 17, 2011
March 17, 2011
Nominal | ||||||||||||||||||
Rig Name | WD | Location | Status | Operator | Order Date | Est. Delivery Date | ||||||||||||
RIGS UNDER CONSTRUCTION Dynamically Positioned Drillships (2) | ||||||||||||||||||
Ocean BlackHawk
|
10,000 | South Korea | Hyundai Heavy Industries Co., Ltd. | DODI | Q1 2011 | Q2 2013 | ||||||||||||
Ocean BlackHornet
|
10,000 | South Korea | Hyundai Heavy Industries Co., Ltd. | DODI | Q1 2011 | Q4 2013 | ||||||||||||
COLD STACKED RIGS (8) = (4 jack-ups, 4 semisubmersibles) | ||||||||||||||||||
Ocean Crusader
|
200 MC | GOM | Stacked | DODI | ||||||||||||||
Ocean Drake
|
200 MC | GOM | Stacked | DODI | ||||||||||||||
Ocean Champion
|
250 MS | GOM | Stacked | DODI | ||||||||||||||
Ocean Spartan
|
300 IC | GOM | Stacked | DODI | ||||||||||||||
Ocean Voyager
|
3,200 | GOM | Stacked | DODI | ||||||||||||||
Ocean Epoch
|
3,000 | Malaysia | Stacked | DODI | ||||||||||||||
Ocean New Era
|
1,500 | GOM | Stacked | DODI | ||||||||||||||
Ocean Bounty
|
1,500 | Malaysia | Stacked | DODI | ||||||||||||||
Forward-Looking Statements: The rig status report contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Forward-looking statements include, without
limitation, any statement that may project, indicate or imply future results, events, performance
or achievements, and may contain or be identified by the words expect, intend, plan,
predict, anticipate, estimate, believe, should, could, may, might, will, will
be, will continue, will likely result, project, budget, forecast, and similar
expressions. Statements by the Company in the rig status report that contain forward-looking
statements include, but are not limited to, statements regarding the current term, future dayrates,
future status, start and end dates, and comments concerning future contracts and availability,
letters of intent, utilization, surveys, downtime and other aspects of the Companys drilling rigs,
as well as statements concerning the moratorium on, or suspension of, certain drilling activities
in the GOM and enhanced safety requirements implemented by the U.S. government, related legal
proceedings and outcomes thereof, the impact of these and related events on our operations and
revenues, the effects of claims of force majeure and the outcomes of discussions with operators
with regard thereto, rigs being upgraded or to be upgraded, rigs under construction and the revised
Ocean Victory contract. Such statements are inherently subject to a variety of assumptions, risks
and uncertainties that could cause actual results to differ materially from those anticipated or
projected. A discussion of the risk factors that could impact these areas and the Companys overall
business and financial performance can be found in the Companys reports and other documents filed
with the Securities and Exchange Commission. These factors include, among others, general economic
and business conditions, contract cancellations, customer bankruptcy, operating risks, casualty
losses, industry fleet capacity, changes in foreign and domestic oil and gas exploration and
production activity, competition, changes in foreign, political, social and economic conditions,
regulatory initiatives and compliance with governmental regulations, customer preferences and
various other matters, many of which are beyond the Companys control. Given these concerns,
investors and analysts should not place undue reliance on forward-looking statements. Each
forward-looking statement speaks only as of the date of the rig status report, and the Company
undertakes no obligation to publicly update or revise any forward-looking statement.