London-listed drilling contractor ADES has secured extensions for two existing contracts for jack-ups Admarine II and Admarine IV and renewed its lease for Admarine VI jack-up, all of which are in the Gulf of Suez area.
The extension of the Admarine II and Admarine IV contracts are in line with historical rates and serve as a prelude to finalizing their renewals. Meanwhile, the renewal of the Admarine VI lease will secure multi-million dollar revenue streams for ADES for the next two years, the driller said in a statement on Thursday.
The Gulf of Suez Petroleum Company (GUPCO), a joint venture between BP and the Egyptian General Petroleum Company (EGPC), has extended its existing contract for ADES’ Admarine II jack-up barge, which expired in December 2017, for another three months.
Admarine II was acquired by ADES in 2004 and has been leased to GUPCO since September 2012. The extension is intended to cover the period during which a fifth consecutive contract renewal term for Admarine II with GUPCO is finalized.
GUPCO also extended its existing contract for ADES’ jack-up rig, Admarine IV, which expired in December 2017, for a further six months. Admarine IV was acquired by ADES in 2013 and has been leased to GUPCO since January 2014 for drilling in the Gulf of Suez. ADES expects to sign a fifth consecutive lease agreement with GUPCO for Admarine IV in the coming months.
Finally, ADES has also renewed its existing contract for its Admarine VI jack-up rig with the General Petroleum Company (GPC), the first national oil company in Egypt. Originally due to expire in March 2018, the contract has been renewed for two years and marks GPC’s third consecutive renewal for Admarine VI since the company first began leasing the rig in April 2015.
Commenting on the contract awards, Dr. Mohamed Farouk , Chief Executive Officer of ADES International Holding, said: “Securing these new awards is directly in line with our growth strategy and allows us to deliver on one of our primary pillars, namely the continued build-up of our backlog.”
He added: “The renewals are also another vote of confidence for ADES at an opportune moment when the Egyptian government has announced plans to open up new areas for oil exploration in the Red Sea.”