Xcite Energy announces Rowan rig amendment

Xcite Energy (XEL) has negotiated an amendment to its rig contract with Rowan Companies' subsidiary, British American Offshore.

The amendment provides "greater flexibility to manage the timing and costs" of a heavy-duty, harsh environment jack-up drilling unit being used for phase 1B of the first-phase development of the Bentley field in the UK North Sea.

The original contract provided for a fixed 240-day initial period for the phase 1A work programme, commencing from arrival of the rig at the Bentley field location. This 240-day period has been shortened, reducing the company's "financial commitment if completion of the work programme is ahead of schedule".

The contract also previously provided for six consecutive one-year extension options, with the first one-year extension option to be exercised by Xcite no later than 120 days after the start of the 240-day initial period.

However, Xcite now has the ability at any time up to 240 days after the end of phase 1A in which to recall an appropriate rig from the Rowan fleet for phase 1B of the Bentley field development.

Additionally, there will be a flexible delivery window of between 14 and 20 months from the exercise of the option for the selected rig to match the construction and installation of facilities for phase 1B of the Bentley field development.

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