KCA Deutag - comment

KCA announced an extension to their existing Equinor contract, for 5 rigs in the Norweigan north sea. Originally the contracts were signed in October 2018 for a period of 4 years with a possibility to extend for another 2yrs (to 2024). This contract extension is just the formal extension of the existing agreement, under the same terms, to September 2024. The value of the extension, $140m for 5 rigs for 2 years ($14m per rig per annum) is similar to the $185m multi-rig extensions announced in November ($14.2m per rig per annum) but we are cautious on drawing too much emphasis on revenue per rig as contracts differ significantly depending on cost and region.

Overall, these contract extensions are not a surprise but add further backlog to KCA.