DALLAS, Texas -- Ensco International Inc. has entered into a definitive drilling contract with Nexen Inc. subsidiary Nexen Petroleum U.S.A. Inc. for the Ensco 8502 ultra deepwater semisubmersible rig.
The drilling contract calls for a minimum two-year primary term in the Gulf of Mexico, which can be converted to a three- or four-year term by Nexen before operations begin.
The aggregate day rate revenue for the two-year term is expected to be approximately $340 million. The day rate will decrease slightly should the primary term be extended.
Under the terms of the agreement, Ensco will be reimbursed for mobilization to the GoM and any special rig upgrades requested by Nexen. The contract is expected to begin in 2Q 2010.
TheEnsco 8502 is the company's third of four ultra deepwater semisubmersible rigs in the Ensco 8500 Series under construction, and will join the Ensco 7500 deepwater semisubmersible rig that was delivered in 2000.
All four of the 8500 Series rigs are being built by the Keppel FELS Ltd. shipyard in Singapore. TheEnsco 8500 is scheduled for delivery in 2Q 2008, the Ensco 8501 in 1Q 2009, the Ensco 8502 in late 4Q 2009, and the Ensco 8503 in 3Q 2010.
Ensco says theEnsco 8500 and Ensco 8501 are committed under long-term drilling contracts.
"We are very pleased to be working with Nexen on another ultra deepwater semisubmersible drilling contract," says Daniel Rabun, Ensco chairman, president, and CEO. "Our $1.5 billion investment in the Ensco 8500 Series demonstrates a solid commitment to increasing our deepwater rig fleet. With approximately 40% of our current $3.6 billion contract backlog attributable to our deepwater fleet, we expect these assets will meaningfully add to our revenue stream for many years."
The Ensco 8500 Series ultra deepwater semis will be capable of drilling in 8,500 ft (2,591 m) of water, and can be upgraded to 10,000 ft (3,048 m) water depth capability. Enhancements include offline pipe handling capability, increased drilling capacity, greater variable deck load, and improved automatic station keeping ability.