UPDATE 1-Cobalt International amends rig contract with Ensco

Fri Nov 12, 2010 10:36am EST

* Says amendment allows to reduce dayrate if rig idles

* Signs rig contract with Diamond Offshore for Angola well

* Diamond rig has base oper. rate of $360,000/day

* Cobalt reports Q3 loss

Nov 12 (Reuters) - Offshore independent oil and gas firm Cobalt International Energy (CIE.N) amended its rig contract with Ensco Plc (ESV.N), to "substantially reduce" daily rate in case delays in the issuance of drilling permits in the Gulf of Mexico keep the rig idle.

Though the Obama administration in October lifted a ban imposed late May on deepwater drilling in the U.S. Gulf, companies say permitting delays still remain a cause of concern.

(Graphic on U.S. offshore drilling: link.reuters.com/xur95j)

"With respect to our modification of the 8503 contract (with Ensco), we felt it best to hedge our exposure to any further delays in recommencing our Gulf of Mexico drilling program," Cobalt International CEO Joseph Bryant said.

The base operating rate for the Ensco 8503 deepwater semisubmersible rig was initially set at $510,000 a day.

U.S. Gulf and West Africa-focused Cobalt International also signed a contract with Diamond Offshore Drilling (DO.N) for a rig to be used in Angola, at a base operating rate of $360,000 per day.

Houston-based Cobalt International, formed in 2005, also reported a third-quarter loss. [ID:nASA012EB]

Shares of the company, with a market value of about $4 billion, have shed about one-fifth of their value since the BP oil spill in late April. The shares were down 1 percent at $10.44 late morning on Friday on the New York Stock Exchange. (Reporting by Krishna N. Das in Bangalore; Editing by Unnikrishnan Nair)

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