Offshore staff

(US,GoM) - Anadarko says it has secured the necessary drilling rigs to execute its deepwater strategy over the next six years. The company said that after reviewing its worldwide deepwater drilling inventory along with the tightening deepwater rig market, they decided to lock in the equipment and services needed to execute its strategy.

Under the operator's long-term plan, alongside consortium partners Dominion and Kerr-McGee, a four-year rig-share agreement was signed with ENSCO International for supply of a newbuild semisubmersible drilling rig with a targeted delivery of mid-2008. The $385 million contract includes four one-year extension options.

ENSCO entered into an agreement with Keppel FELS Ltd. for fabrication of the rig,Ensco 8500, which is valued at approximately $312 million.

Anadarko also executed a three-year, $459 million contact with Dolphin Drilling Ltd. to secure theBedford Dolphin drillship. The rig is expected to be released to Anadarko in mid-2007.

In addition, the operator adds that multi-year contracts worth approximately $1.9 billion are being finalized to extend the company's existing contracts and to secure incremental rigs. Anadarko currently has two deepwater rigs under contracts.

"Our rig-contacting efforts offer compelling economics and facilitate our deepwater drilling strategy," said James T. Hacket, chairman and CEO of Anadarko. "In addition to addressing the cost side of the equation, we will protect our returns by hedging volumes in a manner to cover potential downside rig rates. While we believe the dynamics of the deepwater rig market over the next six years will be very different than past cycles, we think it prudent to manage potential rig rate risk like we manage other risks by controlling the downside and executing upon our operational strategy."

09/26/05