FEBRUARY 21, 2013 — Houston headquartered Hercules Offshore, Inc. has agreed to acquire the offshore drilling rig Ben Avon from a subsidiary of Aberdeen, Scotland, headquartered KCA Deutag. The purchase price is $55 million in cash. The Ben Avon is a LeTourneau Class 82 SD-C self-elevating jack-up registered and flagged in Panama. Hercules Offshore expects the acquisition to close by late-March 2013.
Hercules Offshore has signed a Letter of Agreement for a three-year rig commitment for use of the Ben Avon with Cabinda Gulf Oil Company Limited (CABGOC) for use of the Ben Avon and expects to generate total revenue of approximately $119 million over this three-year period under the contract. Subject to the execution of a mutually agreed drilling contract, the company expects the rig to commence work as early as May 2013.
John T. Rynd, Chief Executive Officer and President of Hercules Offshore stated, "We are very pleased to be able to acquire the Ben Avon and execute an LOA with CABGOC. With this transaction, we continue to opportunistically expand our international presence and scale, add significant long term backlog and cash flow, and reaffirm our commitment to CABGOC, a key global client, at economics that are beneficial for all parties. The LOA for the Ben Avon replaces our prior contract with CABGOC for the Hercules 185, at a substantial improvement in dayrate and provides for a new full three year term. The Ben Avon is a well-maintained rig that recently completed an extensive five year special survey. Given the good condition of the rig, and its close proximity to the drilling location, we expect to spend only minimal additional capital to get it on contract."