SFL - New $100 Million Contract for Semi-Submersible Rig Hercules

Rhea-AI Summary

SFL Corporation Ltd. has signed a drilling contract in Canada with a subsidiary of Equinor ASA for the semi-submersible rig Hercules. The contract is worth approximately $100 million and is for one well plus one optional well. The contract is expected to commence in the second quarter of 2024, with a firm contract period of approximately 200 days. Odfjell Drilling will manage the rig on behalf of SFL. This contract brings SFL's revenue backlog on Hercules to approximately $200 million, securing employment for the rig until the fourth quarter of 2024.

SFL Corporation Ltd. (NYSE: SFL) (“SFL” or the “Company”) announced today that it has signed a drilling contract in Canada with a subsidiary of Equinor ASA for the harsh environment semi-submersible rig Hercules. The estimated contract value is approximately $100 million.

The contract is for one well plus one optional well, and is expected to commence in the second quarter of 2024. The duration for the firm contract period is approximately 200 days including transit to and from Canada. Odfjell Drilling will manage the rig on behalf of SFL under the contract.

Hercules is currently drilling for ExxonMobil in Canada before it will transit to Namibia for a contract with Galp Energia expected to commence in the fourth quarter of 2023.

Ole B. Hjertaker, CEO of SFL Management AS, said in a comment: “We are pleased to sign the third contract for the Hercules since we took redelivery of the rig at the end of 2022 with yet another blue-chip operator. With this contract, SFL has now approximately $200 million of revenue backlog on Hercules and secured undisrupted employment for the rig until the fourth quarter of 2024. This contract together with other recent contract rewards in the industry illustrates that the market for advanced harsh environment semi submersibles is firming and expected to remain strong for a prolonged period.”

August 14, 2023

The Board of Directors
SFL Corporation Ltd.
Hamilton, Bermuda

Investor and Analyst Contacts:
Aksel Olesen, Chief Financial Officer, SFL Management AS
+47 23 11 40 36
André Reppen, Chief Treasurer & Senior Vice President, SFL Management AS
+47 23 11 40 55
Marius Furuly, Vice President - IR, SFL Management AS
+47 23 11 40 16

Media Contact:
Ole B. Hjertaker, Chief Executive Officer, SFL Management AS
+47 23 11 40 11

About SFL

SFL has a unique track record in the maritime industry and has paid dividends every quarter since its initial listing on the New York Stock Exchange in 2004. The Company’s fleet of vessels is comprised of container vessels, car carriers, tanker vessels, bulkers and offshore drilling rigs. SFL’s long term distribution capacity is supported by a portfolio of long term charters and significant growth in the asset base over time. More information can be found on the Company's website: www.sflcorp.com

Cautionary Statement Regarding Forward Looking Statements

This press release may contain forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including SFL management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although SFL believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, SFL cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.

Important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward looking statements include the strength of world economies, fluctuations in currencies and interest rates, general market conditions in the seaborne transportation industry, which is cyclical and volatile, including fluctuations in charter hire rates and vessel values, changes in demand in the markets in which the Company operates, including shifts in consumer demand from oil towards other energy sources or changes to trade patterns for refined oil products, changes in market demand in countries which import commodities and finished goods and changes in the amount and location of the production of those commodities and finished goods, technological innovation in the sectors in which we operate and quality and efficiency requirements from customers, increased inspection procedures and more restrictive import and export controls, changes in the Company’s operating expenses, including bunker prices, dry-docking and insurance costs, performance of the Company’s charterers and other counterparties with whom the Company deals, the impact of any restructuring of the counterparties with whom the Company deals, and timely delivery of vessels under construction within the contracted price, governmental laws and regulations, including environmental regulations, that add to our costs or the costs of our customers, potential liability from pending or future litigation, potential disruption of shipping routes due to accidents, political instability, terrorist attacks, piracy or international hostilities, the length and severity of the ongoing coronavirus outbreak and governmental responses thereto and the impact on the demand for commercial seaborne transportation and the condition of the financial markets, and other important factors described from time to time in the reports filed by the Company with the United States Securities and Exchange Commission. SFL disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

FAQ

What is the drilling contract that SFL Corporation Ltd. has signed?

SFL Corporation Ltd. has signed a drilling contract in Canada with a subsidiary of Equinor ASA for the semi-submersible rig Hercules.

What is the value of the drilling contract?

The drilling contract is worth approximately $100 million.

When is the contract expected to commence?

The contract is expected to commence in the second quarter of 2024.

How long is the firm contract period?

The firm contract period is approximately 200 days.

Who will manage the rig on behalf of SFL?

Odfjell Drilling will manage the rig on behalf of SFL.

How much revenue backlog does SFL have on Hercules?

SFL has approximately $200 million of revenue backlog on Hercules.

Until when is the employment for the rig secured?

The employment for the rig is secured until the fourth quarter of 2024.