Maersk adds new rig to its fleet

COPENHAGEN, Denmark, May 27 (UPI) -- Maersk Drilling said Friday it acquired a rig designed for harsh environments from struggling rival Hercules Offshore for deployment in the North Sea.

Maersk entered into an agreement with a Hercules subsidiary to acquire the harsh environment jack-up rig Hercules Highlander. The rig will move immediately from its shipyard in Singapore to start a five-year drilling program in the North Sea in a deal with BP and Japanese company JX Nippon.

For Maersk, the addition gives it a running start with a rig already covered under a five-year contract. It enters the company's fleet under the name Maersk Highlander.

Hercules filed for bankruptcy in the midst of the crude oil market downturn, only to re-emerge in November facing additional financial pressures. John Rynd, the president and CEO of the company, said the recovery in crude oil prices toward $50 per barrel was encouraging, but it hasn't yet translated into an improvement in business prospects.

Hercules had a series of rig contracts suspended as lower crude oil prices during the first quarter left its customers with less capital to invest in exploration and productive activity.

Maersk sends the Highlander rig to the Culzean natural gas field off the British coast. The Culzean gas field was discovered in 2008 and its peak production of an average 75,000 barrels of oil equivalent is enough to meet 5 percent of British gas demand.

The company said Culzean field is the largest discovered in the region in more than a decade.

Acquisition terms weren't disclosed and there was no public comment issued by Hercules.