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) hasawarded the company a drilling contract for the construction of anenhanced Enterprise-class drillship plus multi-year contractextensions for two of the company's Fifth-Generation DeepwaterFloaters, the drillship Discoverer Deep Seas and semisubmersible rigCajun Express. Combined revenues possible from the three agreementstotal approximately $1.7 billion over 10.5 years.
The enhanced Enterprise-class drillship, to be named theDiscoverer Clear Leader, is being designed to include the mostadvanced drilling capabilities in the offshore drilling industry,building on Transocean's successful Enterprise-class drillship designand the company's industry-leading position in the ownership andoperation of High-Specification mobile offshore drilling units fordeepwater and harsh environment drilling applications. Chevron hasawarded the company a five-year contract, which is expected tocommence during the second quarter of 2009, after an estimated30-month shipyard construction phase, followed by sea trials,mobilization to the U.S. Gulf of Mexico and customer acceptance. Thecontract commencement date is contingent on vendor performance andother factors. During the first three years of the contract, revenuesof approximately $493 million are possible. The last two years of thecontract are linked to the standard West Texas Intermediate oil pricewith a floor of $40 per barrel and a ceiling of $70 per barrel thatcould result in potential revenues between $292 million and $365million over that period.
Construction of the dynamically positioned, double-hull drillshipDiscoverer Clear Leader is scheduled to take place at the DaewooShipbuilding and Marine Engineering Co., Ltd. yard in Okpo, SouthKorea, with an estimated total capital expenditure of approximately$650 million. The Discoverer Clear Leader will feature Transocean'spatented dual-activity drilling technology, allowing for paralleldrilling operations designed to save time and money in deepwater wellconstruction, compared with conventional rigs. The dual-activitytechnology, along with a new and enhanced top drive system, anexpanded high-pressure mud-pump system, expanded completionscapabilities and other unique features of the drillship target thedrilling of wells up to 40,000 feet of total depth. The rig will havea variable deckload of more than 20,000 metric tons and will becapable of drilling in water depths of up to 12,000 feet. TheDiscoverer Clear Leader will be an enhanced version of Transocean'sthree predecessor Enterprise-class drillships, which have setdeepwater drilling records in recent years, including the worldwater-depth drilling record of 10,011 feet held by the Discoverer DeepSeas.
In addition to the five-year contract on the Discoverer ClearLeader, Chevron has exercised a final one-year priced option on theFifth-Generation Deepwater drillship Discoverer Deep Seas, which isexpected to commence in January 2008 following an estimated 20-dayout-of-service period for maintenance. Simultaneously, Chevron hasawarded a two-year contract extension for the rig with an expectedcommencement date of January 2009. Revenues of approximately $116million are possible over the one-year priced option period, while thetwo-year contract extension could generate revenues of approximately$354 million.
Also, the Fifth-Generation Deepwater semisubmersible rig CajunExpress has been awarded a 2.5-year contract extension by Chevron withan expected commencement date of July 2007, in direct continuation ofthe rig's current contract assignment with Chevron in the U.S. Gulf ofMexico. Revenues of approximately $420 million are possible over the2.5-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's32 High-Specification Deepwater Floaters, 13 of which areFifth-Generation Deepwater Floaters capable of operating in waterdepths of 7,500 feet and greater. Both units entered service in 2001following construction programs in El Ferrol, Spain, and CorpusChristi, Texas and Singapore.
Statements regarding the enhanced Enterprise-class rig, operatingspecifications, contract durations, contract commencement dates,revenues, cost, duration and location of construction, timing andduration of maintenance and mobilization, area of operations, as wellas any other statements that are not historical facts, areforward-looking statements that involve certain risks, uncertaintiesand assumptions. These include but are not limited to operatinghazards and delays, actions by customers and other third parties,factors affecting the duration of contracts including well-in-progressprovisions, the actual amount of downtime, factors resulting inreduced applicable dayrates, the future price of oil and gas and otherfactors detailed in the company's most recent Form 10-K and otherfilings with the Securities and Exchange Commission (SEC), which areavailable free of charge on the SEC's website at www.sec.gov. Shouldone or more of these risks or uncertainties materialize, or shouldunderlying assumptions prove incorrect, actual results may varymaterially from those indicated.
Transocean Inc. is the world's largest offshore drillingcontractor with a fleet of 90 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 32High-Specification Floaters (semisubmersibles and drillships), 23Other Floaters, 25 Jackup Rigs and other assets utilized in thesupport of offshore drilling activities worldwide. With a currentequity market capitalization in excess of $24 billion, TransoceanInc.'s ordinary shares are traded on the New York Stock Exchange underthe 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.