At the 25th annual Marine Money conference in New York this week, Andreas Stubsrud, Head of Research at Pareto Securities, predicted a need for 200 new jack up rigs as nearly half of the 450 jack ups worldwide approach their 40th birthdays by 2020.
Rowan says they see the need for an additional 15 jack ups off Saudi Arabia driven largely by the need for natural gas production for domestic use.
At present, there are 89 rigs on the global order books, with the majority arriving in 2013.
Stubsrud also notes those rigs which are currently in a “cold stacked” status will likely never return to service. He notes that 22 of the past 23 rigs which have been cold stacked have been scrapped.
Even with a quarter of the global jack up fleet located in the middle east, there are other areas worldwide that continue to support demand such as west Africa, Libya, Indonesia and Mexico. Stubsrud predicts that although the global consensus is that jackup day rates will remain flat, the data supports an improvement in day rates.
Yesterday, Vantage Drilling Company (NYSE Amex: VTG) announced that it had received two contract awards for the Sapphire Driller adding an additional well to the Sapphire Driller’s current drilling program and three wells from another customer in the Ivory Coast. The contracts will commence in continuity with the current drilling program and have an anticipated duration of approximately 215 days. The contract awards will generate an estimate $34.5 million of revenue, net of taxes.
Additionally, the Emerald Driller’s customer in Thailand has exercised their six month option, extending the current contract through the middle of 2013. The exercise of the option adds approximately $23.4 million of backlog.
Vantage Drilling owns fleet of four Baker Marine Pacific Class 375 ultra-premium jackup drilling rigs and two ultra-deepwater drillships, the Platinum Explorer and the Titanium Explorer, as well as an additional ultra-deepwater drillship, the Tungsten Explorer, now under construction.