HOUSTON, June 1, 2015 /PRNewswire/ -- Hercules Offshore, Inc. (NASDAQ: HERO) announced that it received from Saudi Aramco on June 1, 2015, a notice reducing the dayrates under its five year contracts for the Hercules 261 (as announced this morning the contract was reinstated with a contract maturity date of September 29, 2019) and Hercules 262 to $67,000 per day. The reduced dayrates will apply from January 1, 2015, through December 31, 2016. Saudi Aramco also advised the Company that the dayrate for the Hercules 266 has been reduced to $67,000 per day for the remaining term of its contract.
As these dayrate concessions are effective retroactive to January 1, 2015, the Company is required to make an adjustment to its revenues for amounts earned under these contracts during the period from January 1, 2015, through March 31, 2015. This adjustment, which approximates $13 million, will be recorded in the second quarter of 2015. The Company's financial statements as of and for the three months ended March 31, 2015, will not be affected by this concession.
About Hercules Offshore
Headquartered in Houston, Hercules Offshore, Inc. operates a fleet of 29 jackup rigs, including one rig under construction, and 24 liftboats. The Company offers a range of services to oil and gas producers to meet their needs during drilling, well service, platform inspection, maintenance, and decommissioning operations in several key shallow water provinces around the world. For more information, please visit our website at http://www.herculesoffshore.com.
Statements above that are not historical fact are forward-looking statements, including the status of contract discussions, day rates, contract terms and financial statement adjustments. Forward-looking statements by their nature involve substantial risks, uncertainties and assumptions, including without limitation, contract renegotiations with customers, early termination by the customer pursuant to the contract or otherwise, government and regulatory actions and other factors described in the risks and uncertainties described in our periodic reports filed with the Securities and Exchange Commission. Many of these factors are beyond our ability to control or predict.
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SOURCE Hercules Offshore, Inc.
Craig Muirhead, Vice President Investor Relations and Planning, Hercules Offshore, Inc., 713-350-8346