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Rowan enters into drillship contract with Freeport McMoRan

  • In its latest fleet status update, Rowan (RDC -1.7%) says it has entered into a two-year contract with Freeport McMoRan for the Rowan Relentless that will add ~$425M to RDC's current contract backlog, meaning that all four of RDC's ultra-deepwater drillships are now under long-term contracts.
  • The Relentless is expected to be delivered next March and operate in the Gulf of Mexico starting in Q3 2015.
  • RDC began operations on its Rowan Renaissance in April, experiencing 17 days off rate time during Q2.
Comments (5)
  • Marc Rouleau
    , contributor
    Comments (63) | Send Message
     
    Anyone know the day rate for the Relentless contract? Can I just divide $425M by 730? The result, $582K, is less than the day rates of the other three UDW ships, which are contracted at $619K, $608K, and $602K per day.

     

    The contracted day rates seem to be falling in a straight-line trend, but I guess it's a plus that all four of the new ships are contracted through spring 2017.

     

    Any opinions on RDC's long-term prospects?
    25 Jun, 01:11 PM Reply Like
  • saratogahawk
    , contributor
    Comments (1655) | Send Message
     
    The Fleet Status report shows it at $582. That is less than 3% differential for the 2 GOM rates. It will be used in the GOM so doesn't compare to the Renaissance that is in West Africa.

     

    I would say this is a very attractive rate in light of the recent softness. It certainly indicates that newbuilds and high quality equipment will obtain rates reflective of that equipment. Slight differences in rates always happen when you factor in location, client specified equipment, staffing, travel distances, operating cost factors, labor agreements, local tariffs and fees. Don't expect the exact same rate even in the same drilling basin. That is unlikely to happen as each rig has its own cost structure.

     

    I don't own RDC but this contract will make me reevaluate. I wish they paid an industry competitive dividend.
    25 Jun, 01:40 PM Reply Like
  • defunkdreader
    , contributor
    Comments (49) | Send Message
     
    This + the Ensco DS-2 announced last week, and Discoverer Americas upping its rate to $730. Drillships look pretty good for now.
    25 Jun, 02:21 PM Reply Like
  • Marc Rouleau
    , contributor
    Comments (63) | Send Message
     
    Thanks for the detailed perspective, saratogahawk - I'm new to this industry and don't know my way around yet. Very helpful.
    25 Jun, 02:48 PM Reply Like
  • saratogahawk
    , contributor
    Comments (1655) | Send Message
     
    Happy to help.
    25 Jun, 02:52 PM Reply Like
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