PDVSA buys out ENSCO six contracts...
Wednesday January 20, 9:15 pm Eastern Time
biz.yahoo.com
DALLAS, Jan 20 (Reuters) - ENSCO International Inc said PDVSA Petroleo y Gas SA, a subsidiary of the Venezuelan national oil company, has made a lump sum payment to buyout the contracts on four barge drilling rigs owned and operated ENSCO subsidiary.
The four rigs -- ENSCO XI, XII, XIV, and XV -- were operated for PDVSA by the ENSCO subsidiary under contracts that were scheduled to expire in the third quarter of 1999.
ENSCO said it received a lump sum payment of $13.5 million, which equates to about 91 percent of the cash flow that would have been earned on the contracts through their original expiration date.
In addition, ENSCO said, PDVSA agreed to an early termination of contracts on two other barge drilling rigs, the ENSCO V and VI, owned and operated by ENSCO's 85 percent owned Venezuelan subsidiary. PDVSA has agreed to pay $5.2 million for early termination of these two contracts, which had original expiration dates of July 1999 and May 1999.
The company will recognize the PDVSA payments as income during the first quarter and will use the proceeds to reduce debt.
PDVSA has decided to reduce the number of rigs it has under contract due to a significant decline in cash flow resulting from lower oil prices, ENSCO said. The company will market the rigs to other potential customers in Venezuela. |
