SFL announced a new 400‑day contract worth $170 million for its Hercules semi‑submersible rig, with operations slated to begin in the first quarter of 2027. The deal is the first major assignment for the rig since it was idled in Norway.
The contract is with a large, investment‑grade multinational oil and gas company, though the name is not disclosed. Hercules will be mobilized later in 2026 and will be managed by Odfjell Drilling under the terms of the agreement.
The agreement provides a predictable revenue stream that will help offset the rig’s warm‑stacking costs and support SFL’s dividend policy. The average daily rate of roughly $425,000 is strong for a harsh‑environment, deep‑water semi‑submersible.
SFL’s Q4 2025 results showed operating revenue of $176 million, a 20.2% year‑over‑year increase, and a net loss of $4.7 million. Operating margins of 33.9% and a backlog of $3.7 billion demonstrate the company’s ability to generate cash flow, but tight liquidity and a low Altman Z‑Score highlight ongoing financial pressure. The new contract is expected to improve cash‑flow stability and reduce the impact of the rig’s high operating costs.
CEO Ole B. Hjertaker said, “We are very pleased to secure a new attractive contract for Hercules on the East Coast of Canada, where the rig has worked multiple times before. We see significant demand for harsh environment, deepwater capable semi‑submersibles towards the end of the decade and believe this contract should position the rig attractively for prospective drilling campaigns.” The announcement signals confidence in the long‑term demand for deep‑water drilling services.
The contract’s 400‑day term and $170 million value represent a material development for SFL, providing a substantial cash‑flow contribution for a high‑cost asset that has been a recent drag on earnings. By turning the idle rig into a revenue generator, SFL strengthens its offshore portfolio and reinforces its commitment to sustaining dividend payments.
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