Diamond Offshore Drilling, Inc. has reached an agreement with a subsidiary of BP Amoco (BP) which provides for a modification to the contract covering the
Ocean Confidence. The modification provides for a postponement of the delivery date from July 1 to December 1 of this year. This extension will allow Diamond Offshore additional time to complete and test the rig for performance in waters up to 7,500 ft. Diamond Offshore will accrue a penalty based upon the delivery date of the rig and has agreed to accrue an additional obligation to BP for certain types of downtime which could occur during the first two wells of the drilling contract. These accruals would incrementally reduce revenue payments from BP to Diamond Offshore during the five-year contract term of the
Ocean Confidence.
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The company currently expects the Ocean Confidence to be delivered by September 30, 2000. Based upon the expected delivery date, future revenue would be reduced by approximately US$3.6 million. Should the delivery occur on December 1, 2000, the maximum such reduction would be approximately $6.1 million.
Edited by Dev George
