Transocean Announces Formation of Joint Venture to Own and Operate Two New Ultra-Deepwater Drillships Currently under Construction
HOUSTON--(BUSINESS WIRE)--Oct. 24, 2007--Transocean Inc.(NYSE:RIG) today announced that a subsidiary has exercised its optionto purchase a 50 percent interest in a joint venture company withPacific Drilling Limited (\"Pacific Drilling\"). The joint venturecompany will own two ultra-deepwater Samsung-design drillships thatare currently under construction in South Korea. Under the terms of anexclusive marketing agreement, the subsidiary has secured a long-termdrilling commitment for the first joint venture drillship.
The purchase price for Transocean's 50 percent interest in thejoint venture and a promissory note issued by the joint venture wasapproximately $238 million, which represents half of the total costsincurred for the two joint venture drillships through the date of theoption exercise.
Beginning on October 18, 2007, Pacific Drilling will have theright to exchange its interest in the joint venture for TransoceanInc. ordinary shares or cash.
The first joint venture drillship, Deepwater Pacific 1, has beenawarded a firm commitment for a four-year drilling contract, which maybe converted on or prior to October 2008 to a five-year drillingcontract. The drilling contract is expected to commence in the thirdquarter of 2009, following shipyard construction, sea trials,mobilization to location and customer acceptance.
Contract revenues which could be generated over the contractperiod are estimated to be $766 million for the four-year term, or$935 million for the five-year term, if converted. Under eithercontract term, estimated contract revenue of $89 million could begenerated over the first 180 days of the contract. Estimatedcontracted revenue represents the maximum amount of revenue that maybe earned in the firm contract period, excluding revenues formobilization, demobilization and miscellaneous adjustments. Expectedcontract commencement dates are contingent on vendor performance andother factors.
The two drillships are currently under construction at SamsungHeavy Industries' shipyard in South Korea where the Transoceansubsidiary is overseeing construction. Once the drillships beginoperations, a Transocean subsidiary will provide operating support ona cost-reimbursement basis.
The new drillships feature National Oilwell Varco drillingpackages that include advanced offshore drilling technology, includingsignificant off-line tubular-handling and stand-building capabilities,advanced mud system designs, advanced systems for building, storingand running several subsea trees and efficient riser and BOP (blowoutpreventer) handling systems. The drillships will have a variabledeckload of approximately 20,000 metric tons.
Deepwater Pacific 1 will be equipped to work in water depths of upto 12,000 feet and outfitted to construct wells up to 35,000 feetdeep. The estimated delivered cost for the Deepwater Pacific 1,including customer reimbursed equipment, is approximately $685million, excluding capitalized interest.
Deepwater Pacific 2 will be equipped to work in water depths of upto 10,000 feet, upgradable to 12,000 feet, and outfitted to constructwells up to 35,000 feet deep. The estimated delivered cost for theDeepwater Pacific 2, including customer reimbursed equipment, isapproximately $665 million, excluding capitalized interest.Construction is expected to be completed in the fourth quarter of2009.
Statements regarding planned shipyard projects, estimated timingand duration of client contracts, estimated contract revenues, futurecontract commencement dates, completion of construction, or exerciseof option by Pacific Drilling, as well as any other statements thatare not historical facts in this press release, are forward-lookingstatements that involve certain risks, uncertainties and assumptions.These include but are not limited to operating hazards and delays,risks associated with international operations, exercise of option byPacific Drilling, risks relating to newbuilds (including costoverruns), actions by customers and other third parties, the executionof drilling contracts for the Deepwater Pacific 1 and DeepwaterPacific 2, the future prices of oil and gas, and other factorsdetailed in the company's most recent Form 10-K and other filings withthe Securities and Exchange Commission. Should one or more of theserisks or uncertainties materialize, or should underlying assumptionsprove incorrect, actual results may vary materially from thoseindicated.
Transocean Inc. is the world's largest offshore drillingcontractor with a fleet of 82 mobile offshore drilling units. Thecompany's mobile offshore drilling fleet, consisting of a large numberof high-specification deepwater and harsh environment drilling units,is considered one of the most modern and versatile in the world due toits emphasis on technically demanding segments of the offshoredrilling business. The company's fleet consists of 34High-Specification Floaters (semisubmersibles and drillships), 19Other Floaters, 25 Jackups and other assets utilized in the support ofoffshore drilling activities worldwide. With a current equity marketcapitalization in excess of $32 billion, Transocean Inc.'s ordinaryshares 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.