Hercules Offshore reports Angolan contract cancellations
Hercules Offshore, Inc. (Hercules) today announced that due to the failure of Sonangol officials to accept a local representative that meets the Company’s international legal compliance standards, Hercules has experienced delays in obtaining Angolan visas for required crewmembers and delays in importing required parts and equipment into Angola to support operations under the drilling contract for the ‘Hercules 267’. As a result of these delays, the contract for the unit will be terminated. Sonangol has failed to accept any of three different local representatives proposed by Hercules who meet our legal compliance standards, notwithstanding the legal and technical sufficiency of our proposals. The Company understands that working with a local representative is required and the transition to a representative meeting our compliance standards is a necessary condition for Hercules to continue to perform its contract obligations in Angola. The ‘Hercules 267’ was previously mobilised to Gabon from Angola and has been stacked on a zero dayrate since late April 2014. The cessation of Chevron’s contract with the unit reduces Hercules current contract backlog by an estimated USD91.8 million. The result of these circumstances also means that the company has voluntarily forgone a three-year contract award it previously received in Angola for the ‘Hercules Triumph’.