Ensco International Inc. has entered into an agreement with Keppel FELS Ltd. in Singapore to exchange three Ensco rigs and $55 million in cash for the construction of a new high-performance premium jackup rig. The three rigs to be exchanged areEnsco 55, a 300-ft Freide & Goldman 780 Mod II jackup built in 1981, and two Gulf of Mexico platform rigs, Ensco 23 and Ensco 24, built in 1980.
The new premium jackup, to be namedEnsco 107, will be an enhanced KFELS MOD V (B) design modified to Ensco specifications. The rig is a sister rig to Ensco 106, a joint venture project with Keppel FELS currently under construction in Singapore. Ensco 106 will be delivered by year-end, and delivery of Ensco 107 is expected in late 2005. The transaction is subject to execution of a definitive construction contract and regulatory approvals.
"The agreement to exchange three older rigs plus cash for construction of theEnsco 107 is another step in our continuing fleet renewal program," said Carl Thorne, Ensco's chairman and chief executive officer, "and furthers our expansion in the high specification jackup rig market. Ensco 55 is our one remaining F&G 780 Mod II jackup rig that has not been upgraded as part of our fleet enhancement program. Ensco 23 and Ensco 24 have been idle for some time, and including them in the transaction furthers our stated intent of de-emphasizing the more specialized equipment remaining in our fleet. We believe this transaction is a conservative and cost- effective approach to upgrading and rationalizing our rig fleet as the industry continues to evolve to more demanding drilling applications."