NEW YORK (TheStreet) -- Share of Diamond Offshore Drilling Inc. (DO) are lower by -1.92% to $48.60 on Wednesday after the company announced Statoil ASA (STO) terminated its drilling contract with the company eight-months ahead of schedule.
Statoil said it ended the drilling project on the semisubmersible Ocean Vanguard due to "technical aspects of the rig," Petro Global News reports.
Diamond Offshore said it is disputing Statoil's reasoning for terminating the contract and intends to defend its rights under the agreement.
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The contract provided for a day rate of $454,000 and was originally scheduled to end in late February of next year.
Separately, TheStreet Ratings team rates DIAMOND OFFSHRE DRILLING INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate DIAMOND OFFSHRE DRILLING INC (DO) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."