Hercules Offshore Wraps Up Drilling Rig Purchase From Diamond Offshore

Bought offshore drilling rig Ocean Columbia, to be renamed Hercules 266.

Hercules Offshore Inc., Houston, (Nasdaq: HERO) has closed the previously announced purchase of the offshore drilling rig Ocean Columbia from a subsidiary of Diamond Offshore Drilling Inc., Houston, (NYSE: DO) for $40 million in cash.

Ocean Columbia, a LeTourneau Class 82 SD-C self-elevating drilling rig, is to be renamed Hercules 266.

Hercules also announced the execution of a contract for the dry tow transportation of the Hercules 266 from the U.S. Gulf of Mexico to a shipyard in the Middle East in the second quarter of 2012, where the rig will undergo capital upgrade and contract preparation work, before commencing on a three year contract with Saudi Aramco.

During this three-year period, the company expects to generate total revenues of approximately $160.0 million, including a lump-sum mobilization fee.

Hercules Offshore chief executive John Rynd says, “By closing early on the rig acquisition and quickly securing access to a dry tow vessel, we gain greater operational flexibility to perform the required upgrade work and deliver the rig on a timely basis. Our current operations for Saudi Aramco with the Hercules 261 and Hercules 262 provide us with significant experience at the shipyard in dealing with Saudi Aramco's high standards.”