H&P, Saudi Aramco agree to terms on multi-rig contract

H&P and Saudi Aramco have finalized terms for a tender award on seven super-spec rigs. The rigs were each awarded five-year contracts with one-year options. Operations are expected to commence shortly after delivery, which for a majority of these is scheduled for Q4 2024. Similar to the one-rig award with Saudi Aramco in August 2023, these rigs will be sourced from H&P’s idle super-spec FlexRigs in the US.

During fiscal 2024, H&P plans to convert the rigs to walking configurations and further equip them to suit Saudi Aramco’s unconventional gas drilling rig specifications. The bulk of CAPEX required to prepare these rigs was included as part of H&P’s fiscal 2024 CAPEX budget with the remainder to be spent early in fiscal 2025.

In total, expectations are for capital expenditures related to these rigs to be approximately $175 to $196 million, of which $30 to $35 million is expected to be spent in fiscal 2025. Additionally, H&P expects this contract award to contribute more than $25 million to its International Solutions segment direct margin on an annualized basis.