Transocean Inc. to Commence Sedco 700-Series Upgrade Following Commitment from Shell
HOUSTON, Nov 07, 2005 (BUSINESS WIRE) -- Transocean Inc. (NYSE:RIG) today announced that it has entered into an agreement with an affiliate of Royal Dutch Petroleum (Shell) for the upgrade of one of Transocean's Sedco 700-series semisubmersible rigs. Under the terms of the agreement, Shell has committed to a firm period of three years under a drilling contract to be finalized by the parties based upon stated drilling contract principles. Shell is entitled to extend the term of the contract by any period up to a maximum of two years by exercising an extension option. The rig is expected to complete the necessary shipyard work in approximately May 2007 and is scheduled to commence drilling operations following rig commissioning and customer acceptance. Shell reserves the right to terminate the contract should the shipyard work not be completed by February 15, 2008. The Sedco 700-series semisubmersible will be selected from Transocean's fleet of Other Floaters. Revenues of approximately $385 million could be generated over the firm three-year contract duration, excluding revenues for mobilization, de-mobilization and client reimburseables. Revenues which could be generated during the option period are subject to mutually agreed dayrates.
The upgrade of the Sedco 700-series unit is expected to commence in early 2006 at a shipyard to be determined. The estimated cost of the upgrade, which includes dynamic positioning station keeping and water depth drilling capability up to a maximum of 6,000 feet, is $300 million depending on final unit technical specifications and other factors.
Once completed, the upgraded Sedco 700-series unit will increase the company's High-Specification Floaters fleet to 33 units, with 29 of the units capable of operating in water depths of 4,500 feet and greater.
Statements regarding contract duration, operational commencement date, revenues, upgrade costs, shipyard commencement and completion, finalization of the drilling contract, 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, the future price of oil and gas, the actual revenues earned 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 92 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 32 High-Specification Floaters (semisubmersibles and drillships), 24 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 $19 billion, Transocean Inc.'s ordinary shares are traded on the New York Stock Exchange under the symbol "RIG."
SOURCE: Transocean Inc.
Transocean Inc., Houston Analyst Contact: Jeffrey L. Chastain, 713-232-7551 or Media Contact: Guy A. Cantwell, 713-232-7647