Lamprell secures $350m drilling rig contract

Oil rig manufacturer Lamprell has been formally awarded a $350m (£269.50m) contract to make and deliver two jack-up drilling units with International Maritime Industries (IMI).

The two rigs will be built collaboratively and Lamprell said the vast majority of the work will be performed at its UAE facilities with final commissioning works performed in Saudi Arabia.

The first rig is expected to be completed in just over two years, while the second will be delivered three months later.

The project is expected to begin immediately, including a 25% downpayment to Lamprell amounting to $87.9m, which it expects to receive in late January. Lamprell said the downpayment puts it in a stronger net cash position as it begins 2020, even when taking into consideration the $25.8m equity contribution to its IMI investment, which is set to be made in the first quarter.

Chief executive officer Christopher McDonald said: "We are delighted to have secured the formal award for the first two jackup rigs as part of our partnership with IMI and expect to host a substantial number of Saudi nationals during the course of the project in our facilities as part of building IMI's capabilities. The maritime yard in Saudi Arabia is a significant part of the country's economic ambition and we are honoured to play a role in its realisation."

At 1050 GMT, the shares were up 8.8% at 37.10p.