Drilling contractor Shelf Drilling has received a suspension notice from client Saudi Aramco for its jack-up ‘High Island IV’, which is currently operational offshore Saudi Arabia.
According to the drilling contractor, the contract suspension will be effective upon completion of work that is currently underway.
Shelf Drilling noted that the contract for the High Island IV jack-up rig would be suspended for 12 months.
Built in 1980, the jack-up rig has been working for Saudi Aramco since 2007.
In a press statement, Shelf Drilling said: “The foregoing suspension at zero day rate will be effective upon the completion of work currently in progress and will automatically extend the term of the contract for a period equal to the suspension period.”
Last month, Shelf Drilling registered a net loss of $184.9m in the first quarter of this year (Q1 2020) after it booked a non-cash impairment charge of $188m on long-lived assets.
In the wake of current market conditions as a result of Covid-19 outbreak, Shelf Drilling also initiated cost-cutting measures, including headcount reductions.
The company’s cash and equivalents balance stood at $69m at the end of March.
Meanwhile, the company’s revenue for Q1 2020 was $181.4m. This was a 13.5% increase compared to the previous quarter.
In July 2018, Shelf Drilling signed a definitive agreement to acquire the Ocean Scepter jack-up drilling rig from the subsidiaries of Diamond Offshore.