Houston-based offshore drilling contractor Atwood Oceanics, Inc. (NYSE: ATW) reports that, on January 29, 2011, due to the civil unrest in Egypt, its customer, RWE Dea Nile GmbH gave notice to Atwood subsidiary Alpha Offshore Services Company of a force majeure event affecting the operations of the jack-up drilling rig Atwood Aurora, presently operating offshore Egypt in the Mediterranean,.
Provisions of the drilling contract provide for a day rate of 70% of the current operating rate of $133,000 during the first 15 days of the force majeure event. Thereafter, 50% of the operating rate will apply, up to remediation of the force majeure event or contract termination, whichever occurs first. The drilling contract can be terminated by either party after a 30 day period of a continuing force majeure event.
Atwood says it has secured the well and is in the process of halting offshore operations.
February 1, 2011