Ensco said on Thursday that the termination will become effective in early fourth quarter of 2016, based on Total’s current well program.

The Ensco DS-7 drillship was built in 2013 by Samsung Heavy Industries shipyard in South Korea and contracted to Total on a three-year contract in Angola.

The rig’s dayrate was in the range of mid-$580,000. It was supposed to be under a contract with Total until November 2017.

According to the offshore driller, the drilling contract obligates the customer to pay Ensco daily termination fees through November 2017. For the first 90 days following the early fourth quarter 2016 effective date, the daily termination fee is equal to the operating day rate of approximately $585,000.

For the remaining term through November 2017, the daily termination fee is equal to 75% of the operating day rate, or approximately $439,000. Daily termination fees payable by the customer will be defrayed during any period that Ensco contracts the rig to a third party through November 2017.

Ensco added that the customer is also contractually obligated to pay a demobilization fee.

The company noted that, given these contract terms, Ensco does not anticipate a material impact to its financial results for 2016 and 2017 as a result of this termination.

Ensco DS-7 is the fifth of eight rigs in the company’s ultra-deepwater DP3 drillship series, which are equipped with technological features for drilling and completing deepwater wells including DPS-3 certified dynamic positioning, six-ram 15,000 psi BOPs, enhanced off-line capability, 2.5 million-pound hook load on main rotary, 6,000-barrel active and 7,400-barrel reserve dual-fluid systems, 165 MT active heave subsea crane, significant storage and deck space, and accommodations for up to 200 persons.

Source: Offshore Energy Today