Saudi Aramco canceled its contract Thursday with Hercules Offshore to lease the Hercules 261 jackup rig.
The contract termination will be effective on March 27.
The deal was initially set to expire in late 2019.
Details about the total value of the contract have not been disclosed.
The Hercules 261 is of a Marathon Letourneau Class 82-SDC design and can operate in water depths of 250 feet with a drilling depth rating of 20,000 feet.
“The company is in the process of seeking a basis for continuing the Hercules 261 contract,” Hercules said.
Houston-based Hercules said it has been in talks with state owned Saudi Aramco about possibly cutting its day rates for the Hercules 262 and Hercules 266 rigs.
The company is currently negotiating contract extensions for the Hercules 262 and Hercules 266 and said it has not received any notice of termination for either of those rigs.
Last month, Saudi Aramco chief Khalid al-Falih said the company will renegotiate some contracts and postpone projects, including a $2 billion clean fuels plant, to better accommodate low oil prices.