Hercules Offshore gets Saudi contract extension

A state-run oil company in Saudi Arabia extended the terms of a rig contract through June at the previously agreed day rate, rig company Hercules Offshore said.

In a fleet status report from March, Hercules said the revised terms of the contract for the Hercules 266 rig expired Thursday. The company announced it received notice from Saudi Aramco the terms were extended to June 30.

"The day-rate for the Hercules 266 will remain at $63,650 per day through the term of the contract extension," the company said in a statement.

Saudi Aramco canceled a contract to lease the Hercules 261 rig in February 2015. At the time, Hercules said it was working to negotiate lower rates for two other rigs, Hercules 262 and Hercules 266.

Hercules 261 was listed in the company's fleet status update as having a day rate around $135,000. At the time of the cancellation for 261, rigs 262 and 266 had a combined average day rate of around $118,000.

The February 2014 suspension came as crude oil prices were plummeting in response to a decision from the Organization of Petroleum Exporting Countries to keep production steady despite a weakened market. Oil prices have since fallen from above $100 per barrel in mid-2014 to around $40 per barrel.

After the February 2014 move, Hercules posted a first quarter net loss of $57.1 million, compared to net income of $19.9 million during the first quarter of 2014. In August, the company filed for Chapter 11 bankruptcy protection.

Last week, the company said all segments of its portfolio have been negatively impacted by the market downturn.