Hercules Africa contracts cancelled

Jack-up owner Hercules Offshore said two rig contracts had been cancelled off West Africa after the company could not secure visas for crew members.

Hercules revealed in a securities filing that officials with Angola state-run Sonangol declined to accept any of the three local representative "that meet the company’s international legal compliance standards".

The company has thus "experienced delays in obtaining Angolan visas for required crew members and delays in importing required parts and equipment into Angola to support operations".

Angolan regulations require contractors to work with a local representative.

As a result of the dispute, the contract for the Hercules 267 "will be terminated". Hercules will also "voluntarily" forgo a three-year contract previously inked in Angola for the Hercules Triumph.

The US company recently moved the Hercules 267 to Gabon from Angola. The rig has been on zero dayrate since May.

The terminated contract will reduce Hercules' current estimated future backlog by an estimated $91.8 million until it can find another customer for the rig.

Hercules also said in its fleet status report that it was "ready-stacking" the Hercules 212 in the Gulf of Mexico and the Hercules 260 in Gabon.

Global Hunter Securities analyst Mark Brown does not expect any of the rigs to be back to work until late 2014.

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