Noble Corporation and Freeport-McMoRan Oil & Gas have come to an agreement over the cancellation of contracts for drillships Noble Sam Croftand Noble Tom Madden.
The vessels were contracted with Freeport through to July and November 2017, however will now be terminated “as soon as practicable” with Freeport compensating Noble with $540m. Noble may also receive additional contingent payments from Freeport of $25m and $50m respectively, depending upon the average price of oil over the next 12 months.
Noble said it will realise over $100m in direct cost savings as a result of the terminations through crew reductions and stacking.
“This agreement represents a favorable resolution for Noble shareholders,” commented David W. Williams, chairman, president and chief executive officer of Noble Corporation.
Freeport can make the $54om payment through a combination of cash, Freeport shares and up to $200m in near-term Noble bonds.
