UPDATE 1-Ensco says return of seized Venezuela rig 'remote'

Thu Jul 16, 2009 12:04am BST
 
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* Company discontinues operations of Ensco 69

* Q2 earnings to be reduced by 26 cents/shr as a result

* Ensco shares down 1.4 pct after 6 pct regular-trade gain

SAN FRANCISCO, July 15 (Reuters) - Ensco International Inc (ESV.N), a U.S. contract oil and gas driller, described the likely return of a rig seized in Venezuela as "remote" and said it filed a claim with its insurance company as it wrote down the value of the rig.

Venezuela, financially squeezed by the past year's drop in oil prices, seized Ensco 69 in January in a dispute over payment for services, adding Ensco to the ranks of drillers that state oil company PDVSA has refused to pay.

Ensco said on Wednesday it took an $18.1 million charge to account for the rig's book value and other assets, on top of a previous charge of 15 cents per share for the abandoned contract. It said the overall second-quarter impact would now be 26 cents per share.

Shares of Ensco fell to $37.50 in extended trade, after rising nearly 6 percent to close at $38.04 on Wednesday.

"An insurance claim has been filed under Ensco's package policy, which includes coverage for certain political risks. The claim process is in the early stages," Ensco said.

Petrosucre, a unit of PDVSA, continues to operate Ensco 69, and Dallas-based Ensco said it is evaluating legal remedies.  Continued...

 

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