SFL announced a $170mm, 400-day contract for the Hercules semisubmersible (2008) at an estimated dayrate of ~$380k/day in Canada. The contract is expected to commence in 1Q27, putting the rig back to work after being stacked in Norway since late 2024. While the operator was not disclosed, Suncor and Cenovus are the likely candidates — each operating one of the two fields in play. Suncor holds a 48% working interest in Terra Nova (Cenovus 34%, Murphy 18%), while Cenovus holds 60% in White Rose (Suncor 40%). Both fields have existing infrastructure in place, with new work likely structured as tiebacks to their respective platforms.

The Hercules rig has a history of predominantly exploration work, particularly for Equinor on the Norwegian Continental Shelf, and gained wider recognition after drilling Galp’s high-profile Mopane-1X and Mopane-2X discoveries offshore Namibia in early 2024.

Terra Nova is a mature field producing from the Jeanne d’Arc Basin at approximately 100 meters water depth, roughly 350km east of St. John’s, Newfoundland. First oil was achieved in January 2002, and the field has since recovered the majority of its proven reserve base, with recent production averaging only 22,000-27,000 bpd. Terra Nova narrowly avoided decommissioning in 2021 after the Newfoundland government provided funding support to extend the field’s life. The field has good reservoir quality, and the 400-day contract may also include exploration and appraisal drilling of contingent resources to further extend field life.

SFL and the Rig Ownership Question

SFL is primarily a shipping company whose Energy segment includes Hercules and the Linus jackup, the latter contracted with ConocoPhillips on the NCS through 2Q29. Both rigs are arguably non-core assets and eventual sale candidates. With Hercules now contracted, SFL has a more marketable asset.

Odfjell Drilling, which manages Hercules on SFL’s behalf, is the most natural potential buyer. Odfjell recently acquired the Deepsea Bollsta from Northern Ocean for $480mm in December 2025, and while leverage remains below 2.0x, further debt-funded acquisitions in the near term seem unlikely. However, with Odfjell’s market valuation currently implying >$650mm per rig, its share currency offers a meaningful source of cash if accretive terms are met. Hercules would likely be valued below the Bollsta, though it remains material to SFL, representing an estimated 8–12% of SFL’s enterprise value (~$3.75B as of March 6, 2026).

Whether Odfjell pursues Hercules ultimately depends on its view of the rig’s forward marketability. East Canada only produces 200–250k bpd across the various fields, although has longer-term upside tied to Equinor’s potential Bay du Nord project in the nearby Flemish Pass Basin. Bay du Nord remains pre-FID with a decision potentially in 2027, meaning any associated drilling likely falls beyond Hercules‘ current contract expiry in 2Q28. In the interim, the rig would rely on shorter-term work in the region, and Norway remains a natural market, though re-entry to the NCS would likely require capital investment to meet regulatory standards.

With Hercules back at work in 2027, SFL gains a substantial EBITDA uplift after its negative cash generation while idle. Meanwhile Odfjell, as manager, will evaluate potential asset acquisitions in a disciplined manner.