Shelf Drilling has received notification from a customer in the Middle East about the suspension of operations for four jackup rigs, the rig company said on Monday.
Shelf is now in active discussions with the customer about which rigs will be suspended and exactly when the suspension will apply.
The company’s interpretation is that during the suspension period it will have the right to actively market the rigs in question to other customers and opportunities and to terminate the contracts in question, it says.
Affects the guidance
Shelf Drilling also adds that it is expected that the suspensions will affect the financial guidance the rig company presented together with its fourth quarter figures earlier this year.
The expectation then was an adjusted EBITDA result of USD 375-420 million in 2024.
Details of the effect of the suspensions are expected to be presented in connection with the presentation of first-quarter figures, which is scheduled to take place on 15 May.
Challenges await
– We are disappointed by the decision to suspend four of our rigs, especially in light of the outstanding results of our riggers and teams over several years in the Middle East, says outgoing Shelf Drilling CEO David Mullen in the message.
He admits that the new development will create short-term challenges for the company, but also points out that Shelf Drilling has a leading position in several regions and sees opportunities for its rigs.
In addition to the Middle East, the rig company is active in Southeast Asia, India, West Africa, the Mediterranean and the North Sea. The head office is located in Dubai, while the company’s shares are listed on the Oslo Stock Exchange.
So far this year, the Shelf Drilling share is down 12.4 percent.
In February, it was announced that David Mullen is stepping down as CEO to move into a role as acting chairman of Shelf Drilling, while CFO Greg O’Brien has been appointed to take over as CEO. At the same time, Ernie Danner is stepping down as chairman to become an independent adviser to the company. The changes will come into force in August this year.
