Transocean Inc. Awarded Five-Year Contract for Construction of Enhanced Enterprise-Class Drillship and Two Multi-Year Contract Extensions
HOUSTON--(BUSINESS WIRE)--March 1, 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 plus multi-year contract extensions for two of the company's Fifth-Generation Deepwater Floaters, the drillship Discoverer Deep Seas and semisubmersible rig Cajun Express. Combined revenues possible from the three agreements total approximately $1.7 billion over 10.5 years.
The enhanced Enterprise-class drillship, to be named 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 the company a five-year contract, which is expected to commence during the second quarter of 2009, after an estimated 30-month shipyard construction phase, followed by 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. During the first three years of the contract, revenues of approximately $493 million are possible. The last two years of the contract are linked to the standard West Texas Intermediate oil price with a floor of $40 per barrel and a ceiling of $70 per barrel that could result in potential revenues between $292 million and $365 million over that period.
Construction of the dynamically positioned, double-hull drillship Discoverer Clear Leader is scheduled to take place at the Daewoo Shipbuilding and Marine Engineering Co., Ltd. yard in Okpo, South Korea, with an estimated total capital expenditure of approximately $650 million. The Discoverer Clear Leader 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 and will be capable of drilling in water depths of up to 12,000 feet. The Discoverer Clear Leader will be an enhanced version of Transocean's three predecessor Enterprise-class drillships, which have set deepwater drilling records in recent years, including the world water-depth drilling record of 10,011 feet held by the Discoverer Deep Seas.
In addition to the five-year contract on the Discoverer Clear Leader, Chevron has exercised a final one-year priced option on the Fifth-Generation Deepwater drillship Discoverer Deep Seas, which is expected to commence in January 2008 following an estimated 20-day out-of-service period for maintenance. Simultaneously, Chevron has awarded a two-year contract extension for the rig with an expected commencement date of January 2009. Revenues of approximately $116 million are possible over the one-year priced option period, while the two-year contract extension could generate revenues of approximately $354 million.
Also, the Fifth-Generation Deepwater semisubmersible rig Cajun Express has been awarded a 2.5-year contract extension by Chevron with an expected commencement date of July 2007, in direct continuation of the rig's current contract assignment with Chevron in the U.S. Gulf of Mexico. Revenues of approximately $420 million are possible over the 2.5-year contract period.
Estimated contract revenues exclude revenues for mobilization, demobilization, contract preparation and client reimbursables.
The Discoverer Deep Seas and Cajun Express are two of Transocean's 32 High-Specification Deepwater Floaters, 13 of which are Fifth-Generation Deepwater Floaters capable of operating in water depths of 7,500 feet and greater. Both units entered service in 2001 following construction programs in El Ferrol, Spain, and Corpus Christi, Texas and Singapore.
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 90 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), 23 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 $24 billion, Transocean Inc.'s ordinary shares are traded on the New York Stock Exchange under the symbol "RIG."
MULTIMEDIA AVAILABLE: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=5091091 CONTACT: Transocean Inc., Houston Analyst Contact: Jeffrey L. Chastain, 713-232-7551 or Media Contact: Guy A. Cantwell, 713-232-7647 SOURCE: Transocean Inc.