(Dallas)- A wholly-owned subsidiary of ENSCO International Incorporated has entered into a drilling contract with two large independent oil companies to provide a new ultra-deepwater semisubmersible drilling rig, to be namedENSCO 8501.
The drilling contract with Nexen Petroleum U.S.A. Inc., a subsidiary of Nexen Inc. is for a firm three and a half year primary term, with four one-year extension options at mutually agreed day rates.
The term commitment is comprised of a two year obligation by Nexen and a one and a half year obligation by Noble Energy. The aggregate day rate revenue expected to be paid under the contract during the primary term is approximately $423 million. Under the terms of the agreement, ENSCO will also be reimbursed for mobilization and other start-up costs, and day rates will be adjusted for future variances in operating costs.
Keppel FELS Limited in Singapore will constructENSCO 8501 for ENSCO. The total construction cost is currently expected to be approximately $338 million, with mobilization to the GoM anticipated by the second quarter of 2009. ENSCO 8501 is the second semi rig in the 8500 Series, and ENSCO's third deepwater semi rig, joining ENSCO 7500, delivered in 2000, and ENSCO 8500, which is expected to be delivered in the second quarter of 2008.
TheENSCO 8500 Series deepwater semisubmersibles are an enhanced version of the ENSCO 7500. The 8500 Series rigs will be capable of drilling in up to 8,500 ft of water, and can readily be upgraded to 10,000 ft water-depth capability if required. Enhancements include a two million lb quad derrick, offline pipe handling capability, increased drilling capacity, greater variable deck load, and improved automatic station keeping ability. With these features, the 8500 Series rigs will be especially well-suited for deepwater development drilling.
Carl F. Thorne, ENSCO's Chairman and Chief Executive Officer, commented: "We are pleased to have entered into a second transaction of this type in the last few months. As with theENSCO 8500 project, ENSCO 8501 is expected to provide a cost-effective deepwater drilling solution for our customers and expand ENSCO's deepwater capability on a conservative and financially attractive basis. We are gratified to again be working with Keppel FELS shipyard on the ENSCO 8501. We highly value our longstanding relationship which has resulted in a history of successfully delivering high-quality newbuild rigs on time and within budget."