Transocean Inc. to Reactivate Semisubmersible Rig C. Kirk Rhein with Two-Year Contract Award
HOUSTON--(BUSINESS WIRE)--April 17, 2006--Transocean Inc. (NYSE:RIG) today announced that Reliance Industries Limited has awarded a two-year contract for the semisubmersible rig C. Kirk Rhein, Jr. for drilling operations offshore India. The contract is expected to commence in December 2006 following the completion of a reactivation program, which has recently begun. The reactivation program does not involve an upgrade of the rig's current capabilities. Revenues that could be generated over the two-year contract period total an estimated $248 million, excluding revenues for mobilization, demobilization and client reimburseables.
The C. Kirk Rhein, Jr., which entered active service in 1976 and was upgraded to its current specifications in 1997, has been idle in the U.S. Gulf of Mexico since March 2002. The company estimates a cost of $38 million to reactivate and mobilize the rig, comprised of approximately $22 million of period expenses, to be recognized as incurred and largely expected during the second and third quarters of 2006, deferred expenses of $8 million, to be amortized over the two-year contract, and capital expenditures of $8 million, to be depreciated over the remaining useful life of the rig. The C. Kirk Rhein, Jr. is the third reactivation of a Transocean Other Floater (mid-water unit) over the past 10 months, following the commencement of programs during the second half of 2005 for the semisubmersible rigs Transocean Prospect and Transocean Winner, which are expected to be completed in June and August of 2006, respectively.
Statements regarding contract duration, contract commencement date, revenues, cost and timing of completion of reactivation programs, 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 88 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), 22 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 $26 billion, Transocean Inc.'s ordinary shares are traded on the New York Stock Exchange under the symbol "RIG."
CONTACT: Transocean Inc. Jeffrey L. Chastain, 713-232-7551 (Analyst Contact) or Guy A. Cantwell, 713-232-7647 (Media Contact) SOURCE: Transocean Inc.