UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): 19 August 2011
Ensco plc
(Exact name of registrant as specified in its charter)
England and Wales | 1-8097 | 98-0635229 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
6 Chesterfield Gardens
London, England W1J 5BQ
(Address of Principal Executive Offices and Zip Code)
Registrants telephone number, including area code: 44 (0) 20 7659 4660
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 7.01 | Regulation FD Disclosure |
The Fleet Status Report of Ensco plc as of 19 August 2011 is furnished as Exhibit 99.1 to this report.
The information furnished in Item 7.01 and in Exhibit 99.1 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any of the Companys filings under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits |
Exhibit |
Description | |
99.1 | Fleet Status Report of Ensco plc as of 19 August 2011. |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Ensco plc | ||||||
Date: 19 August 2011 | /s/ DOUGLAS J. MANKO | |||||
Douglas J. Manko Controller |
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Exhibit |
Description | |
99.1 | Fleet Status Report of Ensco plc as of 19 August 2011. |
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Exhibit 99.1
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Ensco plc Fleet Status Report 19 August 2011 |
Monthly Changes
Bolded rig names and underlined text signify changes in rig status from previous report.
Segment / Region / Rig |
Design | Water Depth (1) |
Customer/Status | Day Rate $000s US |
Location | Est. Avail / Contract Change |
Comments | |||||||
Deepwater |
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North & South America (excluding Brazil) - See Definitions and Disclaimers |
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ENSCO DS-3 |
Drillship, DP3 Samsung |
10000/12000 | BP | High 480s | U.S. Gulf of Mexico |
Jun. 16 | Plus cost adjustments | |||||||
ENSCO DS-5 |
Drillship, DP3 Samsung |
10000/12000 | Petrobras | Mid 430s | U.S. Gulf of Mexico |
Jul. 16 | Eligible for bonus opportunity up to 17%, plus costs adjustments. | |||||||
ENSCO 8500 |
Semisubmersible DP |
8500/10000 | Eni/ Anadarko |
Mid 290s | U.S. Gulf of Mexico |
Aug. 13 | Lump sum payment of $20 million and one-time reimbursable costs of $27 million amortized over primary contract term, which equals approx. $31,000 per day. Plus cost adjustments and four 1-year same-rate options | |||||||
ENSCO 8501 |
Semisubmersible DP |
8500/10000 | Nexen/ Noble Energy |
Mid 370s | U.S. Gulf of Mexico |
Jun. 13 | Currently allocated to Noble. For Nexens allocation of rig time, see U.S. Gulf of Mexico on Definitions and Disclaimers page. Mob and upgrade costs are reimbursed by Noble and Nexen at approx. $19,000 per day over primary contract term. Plus cost adjustments and unpriced options | |||||||
ENSCO 8502 |
Semisubmersible DP |
8500/10000 | Nexen | High 480s | U.S. Gulf of Mexico |
Jun. 13 | Plus approx. $35,000 per day for reimbursable mobilization expenses and upgrades amortized over 2-year term contract. Plus cost adjustments | |||||||
ENSCO 8503(2) |
Semisubmersible DP |
8500/10000 | Tullow/ Cobalt |
High 430s | French Guiana |
Sep. 11 | Then estimate 25 day demob at 75% of day rate (i.e. mid 320s). Then 21 days at special Cobalt rate of low 210s for upgrades. Then expect to commence original 2-year term contract with Cobalt in U.S. Gulf of Mexico, low 530s, plus reimbursable expenses and upgrades to be amortized over Cobalts primary contract term of approx. $54,000 per day once term contract commences | |||||||
Brazil |
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ENSCO DS-4 |
Drillship, DP3 Samsung |
10000/12000 | BP | Mid 540s | Brazil | May 16 | Plus cost adjustments | |||||||
ENSCO 7500 |
Semisubmersible DP |
8000 | Contracted/sea trials |
Brazil | Oct. 11 | Next to Petrobras to May 14, low 320s. Eligible for bonus opportunity up to 5%. Plus mob and upgrade costs to be amortized over contract at approx. $20,000 per day. Plus cost adjustments | ||||||||
ENSCO 6001 |
Semisubmersible - DP Amethyst 2 |
5000/5600 | Petrobras | Mid 270s | Brazil | Jun. 13 | Eligible for bonus opportunity up to 15%, plus cost adjustments | |||||||
ENSCO 6002 |
Semisubmersible - DP Amethyst 2 |
5600 | Petrobras | Mid 270s | Brazil | Jul. 13 | Eligible for bonus opportunity up to 15%, plus cost adjustments | |||||||
ENSCO 6003 |
Semisubmersible - DP Amethyst 2 |
5600/5700 | Petrobras | High 310s | Brazil | Jan. 17 | Planned shipyard work in 3Q 11 for approx. 50 days. Eligible for bonus opportunity up to 15%, plus cost adjustments | |||||||
ENSCO 6004 |
Semisubmersible - DP Amethyst 2 |
5700 | Petrobras | High 310s | Brazil | Oct. 16 | Eligible for bonus opportunity up to 15%, plus cost adjustments | |||||||
Europe & Mediterranean | ||||||||||||||
ENSCO 5006 |
Semisubmersible - Conv Bingo 8,000 |
6200/7500 | Noble Energy |
Mid 270s | Israel | Oct. 11 | Plus cost adjustments and five 1-well same price options | |||||||
Middle East & Africa | ||||||||||||||
ENSCO DS-1 |
Drillship - DP Gusto 10,000 |
6000/10000 | TOTAL | Mid 190s | Angola | Dec. 14 | Rate increases mid Dec. 11, low 350s. Anticipate two months planned downtime at zero rate in 2012. Plus options and cost adjustments. Eligible for bonus opportunity up to 7% to Dec. 11 and thereafter up to 5% | |||||||
ENSCO DS-2 |
Drillship - DP Gusto 10,000 |
6000/10000 | TOTAL | Mid 460s | Angola | Jul. 13 | Eligible for bonus opportunity up to 5%, plus cost adjustments | |||||||
ENSCO 5001 |
Semisubmersible - Conv Sonat |
5000/6500 | Shipyard | Angola | Sep. 11 | Next to Maersk in Angola to Mar. 12, mid 270s. Plus one 1-well same price option. Then to PetroSA in South Africa to Mar. 14, mid 270s. Plus two 1-well options, low 320s |
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Ensco plc Fleet Status Report 19 August 2011 |
Monthly Changes
Bolded rig names and underlined text signify changes in rig status from previous report.
Segment / Region / Rig |
Design | Water Depth (1) |
Customer/ Status | Day Rate $000s US |
Location | Est. Avail
/ Contract Change |
Comments | |||||||
Deepwater |
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Asia & Pacific Rim |
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ENSCO 8504 |
Semisubmersible DP |
8500/10000 | Contracted/mob/sea trials |
En route to Brunei |
Sep. 11 | Next to TOTAL to Mar. 12, mid 420s. Plus options. Mob and upgrade costs to be amortized over contract at approx. $94,000 per day | ||||||||
Under Construction - uncontracted |
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ENSCO DS-6 |
Drillship, DP3 Samsung |
10000/12000 | Under construction |
South Korea |
4Q11 | |||||||||
ENSCO DS-7 |
Drillship, DP3 Samsung |
10000/12000 | Under construction |
South Korea |
2H13 | |||||||||
ENSCO 8505 |
Semisubmersible DP |
8500/10000 | Under construction |
Singapore | 1H12 | |||||||||
ENSCO 8506 |
Semisubmersible DP |
8500/10000 | Under construction |
Singapore | 2H12 |
(1) | For rigs that may be modified to drill in deeper water depths, both the currently outfitted and maximum upgrade capabilities are shown. |
(2) | While ENSCO 8503 has earned a sublet day rate since its successful completion of acceptance testing, the original two-year contract has not yet commenced. Therefore, mobilization from the shipyard and other related reimbursements are not yet being recognized in revenue. |
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Ensco plc Fleet Status Report 19 August 2011 |
Segment / |
Design | Water Depth (1) |
Customer/ Status |
Day Rate $000s US |
Location | Est. Avail / Contract Change |
Comments | |||||||
Midwater |
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Brazil |
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ENSCO 5000 |
Semisubmersible - Conv Neptune Pentagon |
2300/2650 | Petrobras | Low 240s | Brazil | Jul. 13 | Eligible for bonus opportunity up to 15%, plus cost adjustments | |||||||
ENSCO 5002 |
Semisubmersible - Conv Aker H-3 |
1000 | OGX | Mid 260s | Brazil | Nov. 13 | Rate changes Nov. 11 to low 200s and Nov. 12 to low 220s | |||||||
ENSCO 5004 |
Semisubmersible - Conv F & G Enhanced Pacesetter |
1500 | OGX | Mid 260s | Brazil | Nov. 13 | Rate changes Nov. 11 to low 220s and Nov. 12 to mid 230s | |||||||
ENSCO 5005 |
Semisubmersible - Conv F & G Enhanced Pacesetter |
1500/1700 | Petrobras | Mid 230s | Brazil | Apr. 13 | Eligible for bonus opportunity up to 10%, plus cost adjustments | |||||||
ENSCO 6000 |
Semisubmersible - DP Amethyst |
3400/4000 | Petrobras | Low 150s | Brazil | Feb. 12 | Currently outfitted for workover activity. Eligible for bonus opportunity up to 18%, plus cost adjustments | |||||||
Middle East & Africa |
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ENSCO 5003 |
Semisubmersible - Conv Aker H-3 |
1000 | Shipyard | South Africa | Sep. 11 | Next to SOCO in Congo to Dec. 11, mid 180s. Plus one 1-well same rate option |
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Ensco plc Fleet Status Report 19 August 2011 |
Segment / Region / Rig |
Design | Water Depth |
Customer/ Status | Day Rate $000s US |
Location | Est. Avail / Contract Change |
Comments | |||||||
Jackups |
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North & South America (excluding Brazil) |
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U.S. Gulf of Mexico - See Definitions and Disclaimers |
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ENSCO 59 | F&G | 300 | Cold stacked | Gulf of Mexico | ||||||||||
ENSCO 68 | MLT 84-CE | 400 | Chevron | Low 100s | Gulf of Mexico | Jan. 12 | Day rate does not include certain extra reimbursable costs | |||||||
ENSCO 69 | MLT 84-Slot | 300 | Cold stacked | Gulf of Mexico | ||||||||||
ENSCO 75 | MLT Super 116-C | 400 | Apache | Low 100s | Gulf of Mexico | Oct. 11 | ||||||||
ENSCO 81 | MLT 116-C | 350 | Available | ------------- | Gulf of Mexico | ------------ | ||||||||
ENSCO 82 | MLT 116-C | 300 | Chevron | High 70s | Gulf of Mexico | Jan. 12 | Day rate does not include certain extra reimbursable costs | |||||||
ENSCO 86 | MLT 82 SD-C | 250 | Apache | Low 60s | Gulf of Mexico | Jan. 12 | Rate increases Sep. 11, mid 60s | |||||||
ENSCO 87 | MLT 116-C | 350 | Apache | Low 80s | Gulf of Mexico | Oct. 11 | ||||||||
ENSCO 90 | MLT 82 SD-C | 250 | Arena Energy | High 50s | Gulf of Mexico | Nov.11 | Rate increases Sep. 11, low 60s | |||||||
ENSCO 99 | MLT 82 SD-C | 250 | Available | -------------- | Gulf of Mexico | ------------ | ||||||||
Pride Wisconsin | MLT-Slot | 300 | Cold stacked | Gulf of Mexico | ||||||||||
Mexico | ||||||||||||||
ENSCO 83 | MLT 82 SD-C | 250 | Pemex | Low 110s | Mexico | Nov. 12 | Plus cost adjustments | |||||||
ENSCO 89 | MLT 82 SD-C | 250 | Pemex | High 70s | Mexico | Mar. 12 | Rates adjust to global index rate every 3 months (next Nov. 11) | |||||||
ENSCO 93 | MLT 82 SD-C | 250 | Pemex | High 80s | Mexico | Mar. 12 | Rates adjust to global index rate every 3 months (next Oct. 11) | |||||||
ENSCO 98 | MLT 82 SD-C | 250 | Pemex | Low 110s | Mexico | Apr. 12 | Plus cost adjustments | |||||||
Europe & Mediterranean |
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North Sea | ||||||||||||||
ENSCO 70 | Hitachi K1032N | 250 | PA Resources | High 80s | Denmark | Sep. 11 | Next to Tullow to Dec. 11, low 90s. Then to RWE Dea to Dec. 12, high 80s, Plus five 1-well unpriced options | |||||||
ENSCO 71 | Hitachi K1032N | 225 | Maersk | High 80s | Denmark | Mar. 12 | Plus three 1-year options at escalating day rates | |||||||
ENSCO 72 | Hitachi K1025N | 225 | Maersk | High 80s | Denmark | Jun. 12 | Plus three 1-year options at escalating day rates | |||||||
ENSCO 80 | MLT 116-CE | 225 | Tullow | High 80s | UK | Sep.11 | Next to Wintershall to Feb. 12, low 90s, plus one 1-well unpriced option deferred to after EOG. Then to Dana to May. 12, low 100s. Then to Perenco to Aug. 12, mid 90s, plus one 1-well same rate option. Then to EOG to Feb. 13, high 90s, plus one 2-well unpriced option | |||||||
ENSCO 92 | MLT 116-C | 225 | E.ON | Low 100s | UK | Sep. 11 | Next to Ithaca to Oct. 11, low 100s. Then to RWE Dea to Jul. 12, high 80s. Plus three 1-well unpriced options | |||||||
ENSCO 100 | MLT 150-88-C | 350 | E.ON | Mid 130s | UK | Mar. 12 | Plus three 1-well unpriced options | |||||||
ENSCO 101 | KFELS MOD V-A | 400 | Maersk | Low 170s | UK | Mar. 12 | Plus cost adjustments and one unpriced option | |||||||
ENSCO 102 | KFELS MOD V-A | 400 | ConocoPhillips | Low 200s | UK | Jun. 16 | Rate firm for 8 wells (est. 3 years) thereafter at mutually agreed rate. Plus unpriced options | |||||||
Mediterranean |
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ENSCO 85 | MLT 116-C | 300 | PA Resources | Mid 90s | Tunisia | Sep.11 |
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Ensco plc Fleet Status Report 19 August 2011 |
Segment / Region / Rig |
Design |
Water Depth |
Customer/ Status | Day Rate $000s US |
Location | Est. Avail / Contract Change |
Comments | |||||||
Jackups |
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Middle East & Africa |
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Middle East |
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ENSCO 54 | F&G L-780 Mod II-C | 300 | ADOC/Bunduq | High 50s | UAE | Feb. 12 | Plus cost adjustments and well-to-well unpriced options | |||||||
ENSCO 58 | F&G | 250 | Saudi Aramco | Mid 60s | KSA | Dec. 13 | Plus one 1-year same rate option | |||||||
ENSCO 76 | MLT Super 116-C | 350 | Saudi Aramco | Low 100s | Saudi Arabia | Jun. 14 | Planned shipyard upgrade late Sep. 11 for approx. 40 days at zero rate. Plus one 1-year option, high 150s | |||||||
ENSCO 84 | MLT 82 SD-C | 250 | Contracted/ shipyard |
Bahrain | Oct. 11 | Next to Saudi Aramco to Dec. 14, low 60s. Planned shipyard upgrade mid 2012 for approx. 80 days at zero rate. Plus one 1-year option, mid 70s | ||||||||
ENSCO 88 | MLT 82 SD-C | 250 | Ras Gas | Mid 60s | Qatar | Mar. 12 | Plus multiple options at escalating rates | |||||||
ENSCO 91 | Hitachi | 270 | Saudi Aramco | High 60s | KSA | Jul. 14 | Planned shipyard upgrade late Feb. 12 for approx. 90 days at zero rate. Plus one 1-year option, mid 90s | |||||||
ENSCO 94 | Hitachi 250-C | 250 | Ras Gas | Mid 60s | Qatar | Jan. 13 | Plus multiple options at escalating rates | |||||||
ENSCO 96 | Hitachi 250-C | 250 | Contracted/ shipyard |
Bahrain | Oct. 11 | Next to Saudi Aramco to Dec. 14, low 60s. Planned shipyard upgrade mid 2012 for approx. 80 days at zero rate. Plus one 1-year option, mid 70s | ||||||||
ENSCO 97 | MLT 82 SD-C | 250 | Contracted/ shipyard |
Bahrain | Oct. 11 | Next to Saudi Aramco to Dec. 14, low 60s. Planned shipyard upgrade mid 2012 for approx. 80 days at zero rate. Plus one 1-year option, mid 70s | ||||||||
Pride Hawaii | Levingston | 300 | Cold stacked | Bahrain | ||||||||||
Pride Pennsylvania | MLT | 300 | Cold stacked | Bahrain | ||||||||||
Africa | ||||||||||||||
ENSCO 61 | Levingston | 300 | Perenco | High 80s | Cameroon | Dec. 11 | Plus two 1-well same rate options | |||||||
Asia & Pacific Rim |
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Southeast Asia / Australia |
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ENSCO 52 | F&G L-780 Mod II-C | 300 | Petronas Carigali | Mid 70s | Malaysia | Apr. 13 | Plus one 1-year unpriced option | |||||||
ENSCO 53 | F&G L-780 Mod II-C | 300 | Murphy | Mid 70s | Malaysia | Sep. 11 | Expect to work to Oct. 11, high 70s. Then expect to work to Dec. 11, high 70s. | |||||||
ENSCO 56 | F&G L-780 Mod II-C | 300 | Pertamina | Mid 70s | Indonesia | Apr. 13 | Planned shipyard inspection mid Aug. 11 for approx. 2 weeks. Plus one 6-month unpriced option | |||||||
ENSCO 67 | MLT 84-CE | 400 | Pertamina | Low 100s | Indonesia | Jan. 13 | Plus one 8-month unpriced option | |||||||
ENSCO 104 | KFELS MOD V-B | 400 | ConocoPhillips | Mid 120s | Enroute to Singapore |
Aug. 11 | Next to shipyard for planned upgrade, inspection and mob to Oct. 11 at zero rate. Then to Apache in Australia to Oct. 12, mid 140s. Upgrades amortized over Apaches 1-year term contract of approx. $3,000 per day. Plus one 1-year unpriced option | |||||||
ENSCO 105 | KFELS MOD V-B | 400 | Talisman | Mid 120s | Malaysia | Aug. 12 | Two 1-year unpriced options. Upgrades amortized over Talismans primary contract term of approx. $6,000 per day | |||||||
ENSCO 106 | KFELS MOD V-B | 400 | Newfield | Low 120s | Malaysia | Oct. 12 | Upgrades amortized over Newfields remaining contract term of approx. $4,000 per day | |||||||
ENSCO 107 | KFELS MOD V-B | 400 | Premier Oil | Low 110s | Vietnam | Jan. 12 | Plus five 1-well options at index rate | |||||||
ENSCO 108 | KFELS MOD V-B | 400 | TOTAL | High 120s | Brunei | Jan. 12 | Next planned shipyard inspection for approx. 2 weeks | |||||||
ENSCO 109 | KFELS MOD V- Super B |
350 | Apache | Low 150s | Australia | Oct. 11 | Plus cost adjustments. Next planned shipyard inspection approx. 10 days. Then 10-day mob to PTTEP, low 100s, then work to Mar. 12, mid 160s | |||||||
Under Construction - uncontracted |
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TBD 1 | KFELS Super A | 400 | Under construction | Singapore | 2Q13 | |||||||||
TBD 2 | KFELS Super A | 400 | Under construction | Singapore | 4Q13 |
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Ensco plc Fleet Status Report 19 August 2011 |
Rig |
Design | Water Depth (1) |
Customer/Status | Day Rate $000s US |
Location | Est. Avail / Contract Change |
Comments | |||||||
Other |
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Deepwater Drilling Management |
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Kizomba | Deepwater TLP Drilling Rig |
5000 | ExxonMobil | Mid 70s | Angola | Apr. 15 | ||||||||
Thunderhorse | Deepwater Semisubmersible |
6000 | BP | Mid 80s | U.S. Gulf of Mexico |
Jan. 12 | Plus five 1-year Unpriced options | |||||||
Barge Rig |
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ENSCO I | Barge Rig | Cold stacked | Singapore |
Definitions and Disclaimers
Day Rate Definition. The day rates reflected in this Fleet Status Report are the operating day rates charged to customers, which may include estimated contractual adjustments for changes in operating costs and/or reimbursable cost adjustments for ongoing expenses such as crew, catering, insurance and taxes. The day rates, however, do not include certain types of non-recurring revenues such as lump sum mobilization payments, revenues earned during mobilizations, revenues associated with contract preparation and other non-recurring reimbursable items such as mobilizations and capital enhancements, and the impact of the fair market value adjustments to Prides drilling contracts in place on the 31 May 2011 acquisition date. Routine and non-routine downtime may reduce the actual revenues recognized during the contract term. Additionally, the Company occasionally negotiates special rates with customers as noted in the comments that reduce revenues recognized during the contract term.
Rig Names. Upon completion of the merger with Pride International, Inc., we intend to rename Prides fleet in accordance with our naming convention. We are in the process of completing these name changes, some of which may not be completed for some time. For purposes of our Fleet Status Report, we are using the new names even when the name change has not been completed. Below is a legend showing the name changes.
Legend of Ensco rig names to Pride International rig names
ENSCO DS-1 | Pride Africa | ENSCO 6000 | Pride South America | ENSCO 5002 | Pride Sea Explorer | ENSCO 61 | Pride Cabinda | |||||||
ENSCO DS-2 | Pride Angola | ENSCO 6001 | Pride Carlos Walter | ENSCO 5003 | Pride South Seas | ENSCO 91 | Pride Montana | |||||||
ENSCO DS-3 | Deep Ocean Ascension | ENSCO 6002 | Pride Brazil | ENSCO 5004 | Pride Venezuela | Pride Hawaii | Pride Hawaii | |||||||
ENSCO DS-4 | Deep Ocean Clarion | ENSCO 6003 | Pride Rio de Janeiro | ENSCO 5005 | Pride South Atlantic | Pride Pennsylvania | Pride Pennsylvania | |||||||
ENSCO DS-5 | Deep Ocean Mendocino | ENSCO 6004 | Pride Portland | ENSCO 5006 | Pride North America | Pride Wisconsin | Pride Wisconsin | |||||||
ENSCO DS-6 | Deep Ocean Molokai | ENSCO 5000 | Pride Mexico | ENSCO 58 | Pride North Dakota | |||||||||
ENSCO DS-7 | Deep Ocean Marquesas | ENSCO 5001 | Pride South Pacific | ENSCO 59 | Pride Tennessee |
Forward Looking Statement. Statements contained in this Fleet Status Report that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include words or phrases such as anticipate, believe, estimate, expect, intend, plan, project, could, may, might, should, will and similar words and specifically include statements involving future rig dayrates; cost adjustments; utilization; estimated rig availability; contract duration, status, terms and other contract commitments; customers; rig enhancement projects; new rig commitments; the expected period of time and number of rigs that will be in a shipyard for repairs, maintenance, enhancement or construction; and scheduled delivery dates for new rigs. Such statements are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including the continued impact of the Macondo well incident; governmental regulatory, legislative and permitting requirements affecting drilling operations; changes in worldwide rig supply and demand, competition and technology; future levels of offshore drilling activity; downtime and other risks associated with offshore rig operations, relocations, severe weather or hurricanes; possible cancellation or suspension of drilling contracts as a result of mechanical difficulties, performance or other reasons; risks inherent to shipyard rig construction, repair, maintenance or enhancement; actual contract commencement dates; environmental or other liabilities, risks or losses; our ability to attract and retain skilled personnel on commercially reasonable terms; governmental action, civil unrest and political and economic uncertainties; terrorism, piracy and military action; and the outcome of litigation, legal proceedings, investigations or other claims or contract disputes. In addition to the numerous factors described above, you should also carefully read and consider Item 1A. Risk Factors in Part I and Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations in Part II of our most recent annual report on Form 10-K, as updated in our subsequent quarterly reports on Form 10-Q, which are available on the SECs website at www.sec.gov or on the Investor Relations section of our website at www.enscoplc.com. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward looking statements, except as required by law.
U.S. Gulf of Mexico. Certain Ensco rigs in the U.S. Gulf of Mexico have been and may be further affected by the regulatory developments and other actions that have or may be imposed by the U.S. Department of the Interior. Ensco rig utilization and day rates have been negatively influenced due to regulatory requirements and delays in our customers ability to secure drilling and associated permits. Current or future NTLs or other directives, legislation or regulations may further impact our customers' ability to obtain permits and commence or continue deep- or shallow-water operations in the U.S. Gulf of Mexico. We continue to work with our customers on mutually agreeable contingency plans for our deepwater rigs in the U.S. Gulf of Mexico. In certain cases, we have negotiated reduced day rates with existing customers and/or sublet agreements with other customers in the U.S. Gulf of Mexico or elsewhere.
Ensco has rejected all force majeure notices received since the Macondo well incident as invalid under the terms of the applicable drilling contracts. During mid-December 2010, Ensco received a force majeure notice from Nexen regarding ENSCO 8501. Following delivery of the force majeure notice, Nexen only paid the $280,000 force majeure rate (75% of the mid-$370,000 invoiced applicable day rate at the time) under recent invoices. Ensco, in turn, notified Nexen that it is in default, which Nexen has denied. Ensco has commenced litigation to resolve the dispute.
The full impact of the governments actions and the regulations discussed in this note and potential new regulatory, legislative or permitting requirements has not yet been determined, but could have a further material adverse effect upon our results of operations.
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