John Fredriksen-backed Paratus Energy Services has received a notice from an unnamed client that it would be exercising its options for early termination of the drilling contracts for two of Paratus’ jackups.
The notice was given to the company’s wholly-owned subsidiary Fontis Holdings. The earlier termination of the contracts for the 2007-built Courageous and the 2008-built Intrepid jackups will reduce Fontis’ backlog to approximately $39m, corresponding to 3% of Paratus’ overall $1.2bn backlog.
The reasons cited for the early termination include unfavourable contract terms, such as limited suspension rights and indexation structure of dayrates, and economic considerations. The client, however, did not suggest that the action was driven by a reduced operational need for drilling rigs in 2026.
Paratus believes that this action might enable the client to better align contractual terms across its service providers during 2026. Following this decision, the client has no remaining contractual flexibility to further shorten the contracts for any of Fontis’ rigs.
In the company’s opinion, higher drilling activity will be required to meet the stated production goals of its client in Mexico. Regardless, Fontis will continue to explore opportunities for its fleet both inside and outside of this region.
The drilling contracts for the Courageous and the Intrepid will now expire on February 28, 2026, as opposed to their original expiration date of November 29, 2026, and May 27, 2026, respectively.
Even though the client was not revealed, the two jackups have been under contract with Mexican giant Pemex for many years.
Last week, the company was awarded a 78-day contract extension for the Oberon rig. Paratus claimed in the Oslo Bors filing that all Fontis rigs are currently on contract and, with the exception of the Titania, all rigs are contracted into 2026.
Paratus currently has all its 11 assets under contract, with 10 contracted into next year or beyond, and the majority of contracts extend into 2027 or 2028.
Energy News Beat