Diamond struck by contract termination calls
Diamond Offshore Drilling Inc (“Diamond”) today released its 10-K form to the United States Securities and Exchange Commission (“SEC”). The release contained news that the company has received contract cancellation/terminations for six of its operational rigs in Brazil, UK and Mexico. Petrobras notified the company of its intention to terminate the Ocean Baroness’ contract with immediate effect in Brazil. Whilst on the 12th February 2015, Dana Petroleum gave notice to Diamond that it intended to terminate the drilling contract for the Ocean Nomad semisub, currently operating in the UK. However, the largest cancellation/termination notice came from Pemex who informed Diamond that it intends to terminate contracts for the Ocean Ambassador, Ocean Nugget and Ocean Summit as well as cancelling the future contract for the Ocean Lexington. Diamond highlighted in the release that the company is currently in discussion with each of the three operators regarding the proposed terminations and cancellations which if exercised could result in a significant decrease in revenue for the rig manager.