Aquadrill LLC ("Aquadrill”) has entered into a charter hire agreement with a subsidiary of Diamond Offshore Drilling, Inc. (the “Manager”) to provide the Vela, an MPD outfitted 7th generation drillship, for a one well drilling contract plus one well priced option for operations in the US Gulf of Mexico. The charter hire agreement will be extended if the optional term is exercised.
The terms of the charter hire agreement are consistent with the current management services agreements in place between the Company and the Manager. Further, the resulting financial benefits are as if the Company had entered into the drilling contract directly.
The total contract value for the firm portion of the drilling contract is expected to be $30 million and commencement is expected in September 2022 following the completion of the rig’s current contract, transitioning the rig to the new Manager and contract preparation. The firm well is expected to run until November 2022.
In the event the option is exercised and the work scope is similar to the firm well, the rig is expected to be available in February 2023 and the total additional contract value is expected to be approximately $28.5 million.