Transocean Inc. Awarded a Third Multi-Year Contract for Construction of an Enhanced Enterprise-Class Drillship
HOUSTON--(BUSINESS WIRE)--Aug. 31, 2006--Transocean Inc. (NYSE:RIG) today announced that Chevron Corporation (NYSE:CVX) has awarded the company a drilling contract for the construction of an enhanced Enterprise-class drillship, the third such contract award for Transocean in 2006 and the second contract award from Chevron, following a five-year contract for the construction of the Discoverer Clear Leader announced in March 2006.
The enhanced Enterprise-class drillship, like the Discoverer Clear Leader, is being designed to include the most advanced drilling capabilities in the offshore drilling industry, building on Transocean's successful Enterprise-class drillship design and the company's industry-leading position in the ownership and operation of High-Specification mobile offshore drilling units for deepwater and harsh environment drilling applications. Chevron has awarded Transocean a five-year contract, but has the right to convert the contract to a duration of three years if declared by September 2007. The contract is expected to commence during the first quarter of 2010, following shipyard construction, sea trials, mobilization to the U.S. Gulf of Mexico and customer acceptance. The contract commencement date is contingent on vendor performance and other factors. Revenues which could be generated over a five-year contract period are approximately $862 million, or approximately $609 million should the contract be converted to a duration of three years. Estimated contract revenues exclude revenues for mobilization, demobilization, customer reimbursables and adjustments for the escalation of operating costs at contract commencement and semi-annually thereafter.
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 the two previously announced enhanced Enterprise-class drillships will be constructed. The estimated total capital expenditure for the unit is approximately $670 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 dual-activity technology, along with a new and enhanced top drive system, an expanded high-pressure mud-pump system, expanded completions capabilities and other unique features of the drillship target the drilling of wells up to 40,000 feet of total depth. The rig will have a variable deckload of more than 20,000 metric tons while having the capability of drilling in water depths of up to 12,000 feet.
Statements regarding the enhanced Enterprise-class rig, operating specifications, contract durations, contract commencement dates, revenues, cost, 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, factors resulting in reduced applicable dayrates, 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 83 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 Jackup Rigs and other assets utilized in the support of offshore drilling activities worldwide. With a current equity market capitalization in excess of $21 billion, Transocean Inc.'s ordinary shares are traded on the New York Stock Exchange under the symbol "RIG."
CONTACT: Transocean Inc., Houston Analyst Contact: Jeffrey L. Chastain, 713-232-7551 or Media Contact: Guy A. Cantwell, 713-232-7647 SOURCE: Transocean Inc.