Seadrill Limited has been notified by Husky Oil Operations Limited of the cancellation of the drilling contract for the West Mira semi-submersible drilling rig.
To remind, in the fourth quarter of 2012 Seadrill was awarded a 5-year contract for the West Mira with Husky for operations in Canada and Greenland. The total estimated base revenue potential was approximately $1 billion.
As stated in the company’s second quarter earnings report, due to the late delivery of the rig, the Seadrill had tentatively agreed with Husky to reduce the dayrate on the West Mira.
However, the construction contract with Hyundai Heavy Industries was subsequently cancelled by Seadrill due to the shipyard’s inability to deliver the rig within the timeframe required under the contract. Namely, the delivery date stated in the construction contract was by December 31, 2014.
According to Seadrill, the company remains in discussions with Husky to find an alternative solution to meet its drilling requirements.