Transocean Inc. Awarded a Third Multi-Year Contract for Construction of an Enhanced Enterprise-Class Drillship
HOUSTON--(BUSINESS WIRE)--Aug. 31, 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, the third such contract award forTransocean in 2006 and the second contract award from Chevron,following a five-year contract for the construction of the DiscovererClear Leader announced in March 2006.
The enhanced Enterprise-class drillship, like the Discoverer ClearLeader, is being designed to include the most advanced drillingcapabilities in the offshore drilling industry, building onTransocean's successful Enterprise-class drillship design and thecompany's industry-leading position in the ownership and operation ofHigh-Specification mobile offshore drilling units for deepwater andharsh environment drilling applications. Chevron has awardedTransocean a five-year contract, but has the right to convert thecontract to a duration of three years if declared by September 2007.The contract is expected to commence during the first quarter of 2010,following shipyard construction, sea trials, mobilization to the U.S.Gulf of Mexico and customer acceptance. The contract commencement dateis contingent on vendor performance and other factors. Revenues whichcould be generated over a five-year contract period are approximately$862 million, or approximately $609 million should the contract beconverted to a duration of three years. Estimated contract revenuesexclude revenues for mobilization, demobilization, customerreimbursables and adjustments for the escalation of operating costs atcontract commencement and semi-annually thereafter.
Construction of the dynamically positioned, double-hull drillshipis scheduled to take place at the Daewoo Shipbuilding and MarineEngineering Co., Ltd. yard in Okpo, South Korea, where the twopreviously announced enhanced Enterprise-class drillships will beconstructed. The estimated total capital expenditure for the unit isapproximately $670 million, excluding capitalized interest. The rigwill feature Transocean's patented dual-activity drilling technology,allowing for parallel drilling operations designed to save time andmoney in deepwater well construction, compared with conventional rigs.The dual-activity technology, along with a new and enhanced top drivesystem, an expanded high-pressure mud-pump system, expandedcompletions capabilities and other unique features of the drillshiptarget the drilling of wells up to 40,000 feet of total depth. The rigwill have a variable deckload of more than 20,000 metric tons whilehaving the capability of drilling in water depths of up to 12,000feet.
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 83 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 33High-Specification Floaters (semisubmersibles and drillships), 20Other Floaters, 25 Jackup Rigs and other assets utilized in thesupport of offshore drilling activities worldwide. With a currentequity market capitalization in excess of $21 billion, TransoceanInc.'s ordinary shares are traded on the New York Stock Exchange underthe symbol \"RIG.\"
CONTACT: Transocean Inc., Houston Analyst Contact: Jeffrey L. Chastain, 713-232-7551 or Media Contact: Guy A. Cantwell, 713-232-7647 SOURCE: Transocean Inc.