Equipment Incident: Diamond Offshore Drilling Shares Plummet

Diamond Offshore Drilling (NYSE:DO) shares fell by 2.1% in early trading on Tuesday following an equipment mishap on a rig leased to BP.

The incident, which occurred on February 1, involved the Ocean GreatWhite ultra-deepwater harsh environment semi-submersible rig, located approximately 125 miles west of the Shetland Islands off the U.K. coast. Diamond Offshore (DO) disclosed this in an SEC filing.

According to the company, the rig was not engaged in any drilling operations at the time of the incident, and fortunately, no employees sustained injuries. The structural integrity of the rig was maintained, and the well remains secure with the blowout preventer in place.

The failure of a blowout preventer had catastrophic consequences in the fatal Deepwater Horizon disaster in the Gulf of Mexico in 2010.

Diamond Offshore (DO) is making plans to retrieve the sunken equipment. However, the company has stated that it is too early to accurately gauge the financial ramifications of the incident.

BP (BP) indicated that it is evaluating whether the mishap would impact the schedule of its drilling campaign. Last November, BP exercised options that would have likely extended the contract until at least August 2024, with an additional five priced options that could potentially run into Q2 2025, as per UpstreamOnline.com.