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ADES International extends key rig contracts in Gulf of Suez

"Our ability to successfully extend and renew existing contracts with high-profile clients underlines the superiority of ADES' services and its exemplary safety record,” said Dr Mohamed Farouk, ADES chief executive
oil and gas operations
The two rigs will remain in service

Oil and gas services group ADES International Holding Ltd (LON:ADES) told investors it has successfully extended two existing rig contracts in the Gulf of Suez area.

The contracts for the Admarine II and Admarine IV rigs are with the Gulf of Suez Petroleum Company (GUPCO), a joint venture between BP Plc (LON:BP) and the Egyptian General Petroleum Company, was due to expire at the end of 2017.

READ: ADES International inks rig acquisition deal with Nabors

ADES said that the contracts are broadly in line with historical rates and serve as a prelude to finalising their renewals, and it added that the renewal of the VI lease will secure multi-million dollar revenue streams for ADES for the next two years.

The IV contract was due to expire at the end of December and it has been extended for six months, meanwhile. ADES anticipates that it will sign a fifth consecutive lease agreement with GUPCO for the rig in the coming months.

Meanwhile, the VI rig contract was due to expire in March and it will now be renewed for two years.

"Our ability to successfully extend and renew existing contracts with high-profile clients underlines the superiority of ADES' services and its exemplary safety record,” said Dr Mohamed Farouk, ADES chief executive.

READ: ADES International says bidding activity remains strong as it reports a 34% jump in nine month revenues

“Securing these new awards is directly in line with our growth strategy and allows us to deliver on one of our primary pillars, namely the continued build-up of our backlog."

He added: “The renewals are also another vote of confidence for ADES at an opportune moment when the Egyptian government has announced plans to open up new areas for oil exploration in the Red Sea.

“ADES hopes to leverage its position as a leading oil and gas services provider in Egypt to maintain existing relationships as well as develop new ones and scale-up operations in its home country's ever-expanding oil and gas industry."

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