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8-K - FORM 8-K - DIAMOND OFFSHORE DRILLING, INC. | h79407e8vk.htm |
1
Exhibit 99.1
DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
February 2, 2011
February 2, 2011
RECENT COMMITMENTS (See Body of Report For Contract Details/Date Changes and Other Information)
Ocean Guardian
|
three wells plus option | |
Ocean Patriot
|
two-well extension | |
Ocean General
|
one well plus three options |
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 | Actively Marketing | DODI | mid Dec. 2010 | late Mar. 2011 | ||||||||||
GOM | Contract Continuation | ATP | continue six-well minimum | 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 | Resume Original 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 | Actively Marketing | DODI | ||||||||||||
Ocean Titan
|
350 IC | GOM | Current Contract | Ankor | two well extension | low 70s | late Dec. 2010 | early March 2011 |
Note (1). On October 12, 2010, the U.S. government lifted the ban on certain drilling
activities in the GOM, which had been initially imposed on May 30, 2010 following the Macondo well
blowout. All drilling in the GOM is now subject to compliance with enhanced safety requirements
set forth in Notices to Lessees 2010-N05 and 2010-N06, both of which were implemented during the
drilling ban. Additionally, all drilling in the GOM will be 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, both of which were issued on September 30, 2010, once they become final. 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 or when the interim rules, or any future rules, could
become final. Nor are we able to predict when the Bureau of Ocean Energy Management, Regulation
and Enforcement (BOEM) 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 activities remain suspended until the BOEM 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 third 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 On September 13, 2010, we received notice of termination of the drilling
contract from the operator, Anadarko Petroleum Corporation, on the grounds that the actions of
certain governmental authorities, relating to a moratorium on certain drilling activities in the
U.S. Gulf of Mexico following the Macondo well blowout, constitute a condition of force majeure
under the drilling contract. 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
February 2, 2011
February 2, 2011
Nominal | Dayrate | |||||||||||||||
Rig Name | WD* | Location | Status | Operator | Current Term | ($000s) | Start Date | Est. End Date | ||||||||
International Semisubmersibles (26) | ||||||||||||||||
North Sea/Mediterranean | ||||||||||||||||
Ocean Nomad
|
1,200 | North Sea | Current Contract | BG Intl. | one well + 3 options | mid 240s | late Dec. 2010 | early 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 + unpriced option | mid 220s | mid July 2010 | mid July 2011 | ||||||||
Ocean Confidence
|
Angola | Current Contract | Total | assignment from Cobalt | upper 360s | early Feb. 2011 | late March 2011 | |||||||||
Angola | Future Contract | Cobalt | second firm well + unpriced option | low 360s | late March 2011 | early Sept. 2011 | ||||||||||
Mobe to GOM | DODI | early Sept. 2011 | early Nov. 2011 | |||||||||||||
GOM | Future Contract | Murphy | resume interrupted contract + unpriced option | low 510s | early Nov. 2011 | early Nov. 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
February 2, 2011
February 2, 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 | two-year term + unpriced option | between 380-420 | late Jan. 2009 | mid Feb. 2011 | ||||||||
Australia | Future Contract | Apache | two-well extension | between 230-270 | mid Feb. 2011 | early April 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 Epoch
|
3,000 | Australia | Current Contract | Japan Energy | one well | mid 290s | mid Dec. 2010 | early Feb. 2011 | ||||||||
Australia | Five year survey | DODI | early Feb. 2011 | mid May 2011 | ||||||||||||
Ocean General
|
3,000 | Vietnam | Current Contract | PVEP | Approx. two-year term | high 250s | mid Oct. 2008 | early Feb. 2011 | ||||||||
Vietnam | Future Contract | Premier Oil | one well + three unpriced options | low 210s | early Feb. 2011 | mid April 2011 | ||||||||||
Indonesia | Future Contract | Premier Oil | two wells + unpriced option | low 240s | mid April 2011 | mid July 2011 | ||||||||||
Ocean Rover
|
8,000 | Indonesia | Future Contract | Murphy/Hess | est. six months | high 370s | mid Dec. 2010 | mid June 2011 | ||||||||
Malaysia | Resume Current Contract | Murphy | resume two-year ext. | low 450s | mid June 2011 | late Sept. 2011 |
4
DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
February 2, 2011
February 2, 2011
Nominal | Dayrate | |||||||||||||||
Rig Name | WD* | Location | Status | Operator | Current Term | ($000s) | Start Date | Est. End Date | ||||||||
Brazil | ||||||||||||||||
Ocean Ambassador
|
1,100 | Brazil | Current Contract | OGX | 3-year term + unpriced option | 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 + unpriced option | 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 | Current Contract | OGX | 2-year term + unpriced option | low 340s | mid Feb. 2010 | mid Feb. 2011 | ||||||||
Brazil | Remainder term at new blended rate | OGX | revised 2-year term + unpriced option | low 270s | mid Feb. 2011 | late Dec. 2011 | ||||||||||
Brazil | Future Contract | OGX | 1-year extension + unpriced option | 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 | Brazil | Current Contract | OGX | one year + unpriced option | low 340s | mid Feb. 2010 | mid Feb. 2011 | ||||||||
Future Contract | OGX | part one of 2-year term extension + unpriced option | low 310s | mid Feb. 2011 | late Dec. 2011 | |||||||||||
Future Contract | OGX | part two of 2-year term extension + unpriced option | 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 |
5
DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
February 2, 2011
February 2, 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) + unpriced option | 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 | early March 2011 | ||||||||
Brazil | Upgrade for Petrobras | DODI | early July 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 | ||||||||||
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 | Current Contract | Pemex | 52 day extension | low 80s | early Jan. 2011 | late Feb. 2011 | ||||||||
Mexico | Five Year Survey | DODI | late Feb. 2011 | late March 2011 | ||||||||||||
Ocean Scepter
|
350 IC | Brazil | Current Contract | OGX | one-year term + unpriced option | mid 130s | early Feb. 2011 | early Feb. 2012 | ||||||||
Ocean King
|
300 IC | Montenegro | Actively Marketing | DODI | ||||||||||||
Ocean Sovereign
|
300 IC | Thailand | Standby | DODI | early Feb. 2011 | |||||||||||
Thailand | Future Contract | Salamander | Six firm + three unpriced option wells | low 70s | early Feb. 2011 | early May 2011 | ||||||||||
Thailand | Five Year Survey | DODI | early July 2011 | mid Sept. 2011 | ||||||||||||
Ocean Heritage
|
300 IC | Suez Gulf | Current Contract | SUCO | six-month extension | high 50s | late July 2010 | early Feb. 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
February 2, 2011
February 2, 2011
EXPECTED 2011 DOWNTIME 10 DAYS OR LONGER (Subject to Change*)
# Days
# Days
Rig | Q1 | Q2 | Q3 | Q4 | Total | Comments | ||||||||||||||||
Shipyard 5-Year Surveys/Maintenance | ||||||||||||||||||||||
Nugget |
35 | 35 | 5-year survey/maintenance | |||||||||||||||||||
Epoch |
59 | 61 | 120 | 5-year survey/maintenance | ||||||||||||||||||
Clipper |
92 | 92 | 5-year survey/maintenance/upgrade | |||||||||||||||||||
Summit |
35 | 35 | 5-year survey/maintenance | |||||||||||||||||||
Saratoga |
50 | 50 | 5-year survey/maintenance | |||||||||||||||||||
Whittington |
9 | 92 | 101 | 5-year survey/maintenance | ||||||||||||||||||
Sovereign |
75 | 75 | 5-year survey/maintenance | |||||||||||||||||||
Heritage |
40 | 40 | 5-year survey/maintenance | |||||||||||||||||||
Total 5-year Surveys |
94 | 96 | 226 | 132 | 548 | |||||||||||||||||
Intermediate Surveys/Acceptance Testing/Maintenance | ||||||||||||||||||||||
Princess |
45 | 45 | Intermediate survey/maintenance | |||||||||||||||||||
Confidence |
30 | 30 | Acceptance testing | |||||||||||||||||||
Total Contract Prep. |
30 | 45 | 0 | 75 | ||||||||||||||||||
Contract Prep/Maintenance/Other | ||||||||||||||||||||||
Patriot |
15 | 15 | Maintenance | |||||||||||||||||||
Scepter |
31 | 31 | Standby | |||||||||||||||||||
America |
75 | 75 | Maintenance | |||||||||||||||||||
Other Total |
106 | 15 | 0 | 0 | 121 | |||||||||||||||||
Total |
230 | 111 | 271 | 132 | 744 |
* 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 = 530 days
Special Surveys: Endeavor (35); Patriot (35); Yorktown (60); Quest (60); Worker (60); Star (60); Baroness (60).
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
February 2, 2011
February 2, 2011
AVERAGE DAILY RIG OPERATING COSTS
Jack-ups:
|
Standard: | |||
GOM | mid 30s | |||
Mexico | low 50s | |||
Egypt | low 50s | |||
S.E. Asia | low 50s | |||
High-End: | ||||
Brazil | upper 70s | |||
Conv. Moored Floater:
|
Mid-Water: | |||
GOM | low 50s | |||
Brazil | low 100s | |||
Falklands | mid 80s | |||
Indonesia | mid 70s | |||
Australia | low 110s | |||
UK | mid 70s | |||
Norway | low 140s | |||
Deepwater/High Spec: | ||||
GOM | upper 60s | |||
Brazil | low 120s | |||
Australia | mid 130s | |||
West Africa | mid 120s | |||
Egypt | upper 90s | |||
S.E. Asia | mid 110s | |||
DP Floaters:
|
Mid-Water: | |||
Brazil | low 120s | |||
Deepwater/High Spec: | ||||
Courage/Valor | mid 150s | |||
Other 5th gen. Brazil | mid 140s | |||
West Africa | mid 170s | |||
Other Per-Day Expenses Spare equipment repair, other |
upper 10s |
8
DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
February 2, 2011
February 2, 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 (7) = (4 jack-ups, 3 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 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.