* Rowan says move due to demand, not tighter regulation
* Apache ends force majeure claim, sees permits momentum
* Rowan to buy Norway's Skeie Drilling
* Rowan shares off 1.1 pct after losing as much as 6.8 pct
(Adds comments from Rowan CEO, Apache, updates shares)
By Braden Reddall
SAN FRANCISCO, July 1 Offshore rig contractor
Rowan Cos Inc (RDC.N) said on Thursday it was in talks to move
two high-end shallow-water rigs out of the Gulf of Mexico, but
said this was due to demand elsewhere, not tighter U.S.
regulation in the Gulf.
At the same time, client Apache Corp (APA.N) ended its
claim of force majeure and thus its dispute with Rowan after it
received a permit for their shallow-water drilling project in
the Gulf of Mexico and said it hoped the momentum of the
permits process -- slowed under new U.S. regulations after the
disastrous BP Plc (BP.L) well blowout -- would continue.
The news came the same day that Rowan unveiled plans to buy
Norway's Skeie Drilling SKDP.NFF, which itself is building
three high-end jackups, for some $250 million. [ID:nN01114673]
Rowan shares fell nearly 7 percent but then, helped by news
of the end to the Apache dispute, recovered most of those
losses in afternoon trading. A sharp drop in oil prices weighed
on the sector.
There has been speculation that companies would pull rigs
from the Gulf of Mexico due to the six-month U.S. deepwater
moratorium and the accompanying tightened regulations on all
drilling, but Rowan said it was moving the two rigs, the Ralph
Coffman and Bob Palmer, because of demand for them elsewhere.
It did not say where it was moving the rigs, with the
contracts still being negotiated.
Mark Keller, Rowan's executive vice president of business
development, said he expected three-year contracts for the rigs
-- with the same customer -- to be completed within two to four
weeks, with one rig ready to leave by September and the other
"We are not tendering these high-spec rigs out of the U.S.
Gulf of Mexico because we have lost confidence in this market,"
Keller said. "We believe the U.S. Gulf of Mexico will return to
a normal level of permit activities soon, and we remain bullish
on the deep gas play in the region."
Rowan, which currently has seven Rowan rigs contracted in
the Gulf of Mexico, said last Friday that greater constraints
on drilling companies in response to the BP blowout had greatly
slowed shallow-water work. [ID:nSGE65O0F4]
Apache had declared force majeure on a jackup as a result,
before rescinding that claim on Wednesday, Rowan said.
A number of deepwater rig operators have had clients
declare force majeure after the U.S. moratorium. Force majeure
allows a company out of contractual obligations because of
natural or unavoidable catastrophes. [ID:nN28271791]
But Rowan Chief Executive Matt Ralls said he believes the
force majeure declarations among shallow-water operators were
simply strategic moves in case the U.S. permitting process
proved too onerous, and did not show that the operators wanted
out of the contracts.
"As far as the jackup market, there are completely
different dynamics in the Gulf of Mexico regarding the force
majeures that did occur," he said on a conference call to
discuss Skeie. "That was really just operators that were trying
to position themselves in case it took longer to get permits."
Apache said U.S. regulators were working as quickly as they
could under the new rules, and it was encouraged by the permit
award that allowed it to drop the force majeure claim, which
was followed quickly by approval of a separate permit.
"Hopefully, this momentum of getting permits will
continue," an Apache spokesman said.
On Monday, Hercules Offshore Inc HERO.O said Chevron Corp
(CVX.N) had declared a force majeure on one of its jackups in
the Gulf of Mexico. [ID:nN28154545]
A Chevron spokeswoman declined to comment directly on the
discussions earlier this week. "It is unclear when we will be
allowed to resume drilling in the Gulf of Mexico, but we hope
we will be allowed to return to work soon."
Shares of Rowan fell as low as $20.45, losing 6.8 percent,
before recovering much of their losses to close at $21.69, down
1.1 percent, on the New York Stock Exchange.
(Reporting by Braden Reddall; Editing by Lisa Von Ahn, Gary