Transocean Announces Multi-Year Contract for an Enhanced Enterprise-Class Newbuild Drillship
HOUSTON--(BUSINESS WIRE)--June 21, 2007--Transocean Inc. (NYSE:RIG) today announced that a subsidiary of BP PLC (NYSE:BP) has awarded a subsidiary of Transocean a drilling contract for an enhanced Enterprise-class design newbuild drillship with modified specifications for expected operations offshore Angola for which BP is the operator. The enhanced Enterprise-class drillship is expected to be owned and operated by a joint venture which is 65% owned by Transocean and 35% owned by an Angolan partner.
The five-year drilling contract is expected to commence during the third quarter of 2010, following shipyard construction, sea trials, mobilization to Angola and customer acceptance. The term of the drilling contract may be extended to seven years at BP's election on or before March 31, 2008. The contract commencement date is contingent on vendor performance and other factors. Contracted revenues related to the five-year and seven year contract terms are approximately $900 million and $1,159 million, respectively, including mobilization fees and customer reimbursed equipment. Contracted revenue represents the maximum amount of revenue that may be earned in the firm contract period, excluding revenues for demobilization, reimbursement for the escalation of operating costs and miscellaneous adjustments.
Construction of the dynamically positioned, double-hull drillship is scheduled to take place at the Daewoo Shipbuilding and Marine Engineering Co., Ltd. yard in Okpo, South Korea, where three of Transocean's previously announced enhanced Enterprise-class drillships are currently being constructed. The estimated total capital expenditure for the fourth drillship, including customer reimbursed equipment, is approximately $640 million, excluding capitalized interest. The rig will feature Transocean's patented dual-activity drilling technology, allowing for parallel drilling operations designed to save time and money in deepwater well construction, compared with conventional rigs. The rig will also feature expanded completions capabilities. It will have a variable deckload of 20,000 metric tons and the capability of drilling in up to 7,500 feet of water depth, upgradeable to 12,000 feet of water depth and 40,000 feet of total drilling depth with additional equipment.
Statements regarding the enhanced Enterprise-class rig, operating specifications, contract durations, contract commencement dates, the actual amount of contract revenues, capital expenditures, duration and location of construction, timing and duration of maintenance and mobilization, area of operations, as well as any other statements that are not historical facts, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to operating hazards and delays, actions by customers and other third parties, factors affecting the duration of contracts including well-in-progress provisions, the actual amount of downtime including shipyard and maintenance projects, factors resulting in dayrates lower than the contractual dayrate, the future price of oil and gas and other factors detailed in the company's most recent Form 10-K and other filings with the Securities and Exchange Commission (SEC), which are available free of charge on the SEC's website at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.
Transocean Inc. is the world's largest offshore drilling contractor with a fleet of 82 mobile offshore drilling units. The company's mobile offshore drilling fleet, consisting of a large number of high-specification deepwater and harsh environment drilling units, is considered one of the most modern and versatile in the world due to its emphasis on technically demanding segments of the offshore drilling business. The company's fleet consists of 33 High-Specification Floaters (semisubmersibles and drillships), 20 Other Floaters, 25 Jackups and other assets utilized in the support of offshore drilling activities worldwide. With a current equity market capitalization in excess of $29 billion, Transocean Inc.'s ordinary shares are traded on the New York Stock Exchange under the symbol "RIG."
CONTACT: Transocean Inc., Houston
Gregory S. Panagos, 713-232-7551
Guy A. Cantwell, 713-232-7647
SOURCE: Transocean Inc.