Contango exercises Richmond contract option

Contango Operations has exercised an option under its contract with Atwood Oceanics for the rig Richmond.

Offshore staff

HOUSTON -- Contango Operations has exercised an option under its contract with Atwood Oceanics for the rig Richmond. The rig will drill another well in the Gulf of Mexico at $85,000/day.

Prior to the exercise of this option, the contract commitment included the drilling of the current well at a day rate of $75,000 (estimated to be completed around mid-November) followed by the drilling of another well at a day rate of $78,000, the company says.

Contango has assigned the $78,000 day rate well to Newfield Exploration. The Newfield well has an estimated duration of three months. Immediately upon completion of the drilling of the well for Newfield,Richmond will begin drilling the $85,000 day rate well for Contango, which is estimated to take around 60 days to complete.

Contango has an option to drill one additional at a day rate to be negotiated.

11/07/2008

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