Diamond Offshore and Brazilian player Petrobras have reached a settlement over the 2016 cancellation of a contract for the Ocean Valor drilling rig, a dispute that has been tied up in Brazilian courts.

Originally the contact, its termination notice received in August 2016, was due to run through October 2018. The new amendment to the contract would put the rig in an "extended standby period retroactively" from July 2017 to September 2018 at a dayrate of $190,000.

It would then see the rig continue with Petrobras through the end of September 2020 at a dayrate of $289,000.

Diamond had initially filed suit against Petrobras in August 2017 in the 17th Lower Court of Rio de Janeiro Central District, where a judge sided with the drilling contractor and issued an injunction to suspend the contract termination.

Diamond's position was also upheld on appeal in March 2017.

Further, Diamond added:

"The Company’s financial results for the quarterly period ending December 31, 2017 will include a one-time charge of approximately US$20 million for the estimated retroactive adjustment to reflect the discounted standby dayrate earned by the Ocean Valor during the previously-reported quarterly period ended September 30, 2017."