SDLP - Seadrill Partners LLC announces settlement agreement and 18 month extension for semi-submersible West Aquarius
London, United Kingdom, October 10, 2013 - Seadrill Partners LLC announces today that as part of a settlement agreement it has agreed to non-payment for 37 days during the recent mobilization period as a result of the time required for the ultra-deepwater harsh environment semi-submersible West Aquarius to complete modifications and repairs in order to meet the regulatory requirements for operations in Canadian waters and for the operator to receive authorization from the Canadian authorities to commence operation. This loss will negatively impact third quarter results.
In conjunction, it is negotiating an 18 month contract extension thereby extending the operations for the rig off the east coast of Canada until April 2017. The new contract, which will be subject to required approvals by the joint interest owners, is expected to be executed by November 30, 2013.
The total revenue potential for the extension is estimated to be approximately US$337 million. This extension will increase Seadrill Partners average contract term, as at September 30, 2013, from 3.5 years to 3.8 years and increases contracted backlog from US$2.6 billion to US$2.9 billion. It will also increase potential future distribution capacity as a function of an increased day rate.
FORWARD LOOKING STATEMENTS
This news release includes forward looking statements. Such statements are generally not historical in nature, and specifically include statements about the Company's plans, strategies, business prospects, changes and trends in its business and the markets in which it operates. In particular, statements regarding the Company's ability to make cash distributions, the expected performance of the drilling rigs in OPCO's fleet, estimated duration of customer contracts, contract dayrate amounts and the Company's ability to purchase drilling rigs from Seadrill Limited in the future are considered forward-looking statements. These statements are made based upon management's current plans, expectations, assumptions and beliefs concerning future events impacting the Company and therefore involve a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, which speak only as of the date of this news release. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to the performance of the drilling rigs in the Company's fleet, delay in payment or disputes with customers, fluctuations in the international price of oil, changes in governmental regulations that affect the Company or the operations of the Company's fleet, increased competition in the offshore drilling industry, and general economic, political and business conditions globally. Consequently, no forward-looking statement can be guaranteed. When considering these forward-looking statements, you should keep in mind the risks described from time to time in the Company's filings with the SEC. The Company undertakes no obligation to update any forward looking statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, the Company cannot assess the impact of each such factor on its business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward looking statement.