Katrina
Recovery

How long will it take Gulf Coast shipyards to return to pre-Katrina activity levels?

3 months
6 months
9 months
1 year
More than 1 year

September 27, 2006

Rita damages rigs, platforms

Oil companies and drilling contractors have been reporting the status of their Gulf offshore assets following Hurricane Rita. Here are some recent reports:

BP

BP reports that Initial assessment on Sunday via aerial overflights and small crews placed on several BP-operated deepwater production facilities indicate no major damage. However, recommencement of production will require full assessment of facilities, including key downstream infrastructure. Some of the company's onshore locations have been shut-in because plants and other infrastructure downstream of these fields were impacted by the storm.

CHEVRON

Chevron says initial assessments have revealed that the Typhoon tension leg platform (located in 2,000 feet of water in the Green Canyon area approximately 165 miles south-southwest of New Orleans) was severed from its mooring and suffered severe damage during the storm. The facility has been located and is being secured. Chevron has mobilized appropriate resources to address any environmental concerns. No employees are at risk. Prior to the storm, the company safely evacuated employees and contractors from the U.S. Gulf of Mexico facilities. Decisions on when production can be restarted from the company's other offshore facilities will be made when the post-storm assessments are concluded.

DIAMOND OFFSHORE

Diamond Offshore Drilling, Inc. (NYSE:DO)reported that the drilling rigs Ocean Saratoga and Ocean Star broke free from their moorings as Hurricane Rita passed west of both semisubmersibles. Both of the units and their well operations were secured and personnel were evacuated well in advance of the storm.

Both rigs were tracked during the storm by onboard locator beacons. The Saratoga is currently grounded in approximately 35 feet of water on Vermilion block 111. The site is approximately 100 miles northwest of the rig's original location on Green Canyon block 157. The Star is also aground in approximately 35 feet of water on Eugene Island block 142. The site is approximately 100 miles north of the unit's original location on Green Canyon block 768.

Start-up crews re-boarded the Saratoga and Star on Sunday in order to secure the units and to further assess their condition.

Initial fly-bys of other Diamond Offshore rigs in Rita's path have not indicated any significant damage. However, Diamond Offshore will not be able to make a complete assessment of the condition of all of its rigs until personnel are able to re-board the units over the next few days.

ENSCO

ENSCO International Incorporated (NYSE:ESV) announced that it had completed aerial inspections of its Gulf of Mexico rig fleet. All rigs appear to be stable, and none appear to have sustained any structural damage.

The only apparent issues relate to (1) a report that ENSCO 90 is not in trim, (2) the drill floor on ENSCO 68 has shifted, and (3) the ENSCO 69 skid-off drilling package also has shifted on the oil company platform. Onboard inspection of the platform will be completed prior to repositioning the skid-off package.

ENSCO has returned personnel to several rigs, including ENSCO 69, and plans to have personnel back on all rigs by Tuesday evening. ENSCO 7500, the Company's deepwater semisubmersible rig, is back on location and preparing to recommence operations. ENSCO has 17 jackup rigs, one deepwater semisubmersible rig, and three platform rigs in the Gulf of Mexico.

GLOBALSANTAFE

GlobalSantaFe Corporation (NYSE: GSF) reported that two of its offshore oil and gas drilling rigs, the jackups GSF Adriatic VII and GSF High Island III, could not be found on their drilling locations during a search by fixed-wing aircraft Sunday. There were no signs of any major damage from Hurricane Rita to the company's other rigs in the Gulf of Mexico.

GlobalSantaFe's fleet in the Gulf of Mexico includes nine jackup rigs, four semisubmersible rigs and one ultra-deepwater drillship, the GSF C.R. Luigs.

The drillship relocated before the area was impacted by Hurricane Rita, and all other rigs were safely evacuated in advance of the storm.

All of the company's rigs are insured under a hull and machinery policy subject to a total deductible of $10 million for this event. The two missing jackup rigs had a combined net book value at June 30, 2005 of $22.2 million and are insured for a total of $125 million. The rigs contributed $5.3 million of the company's total $135.3 million of net income for the first six months of 2005.

NABORS

Nabors Industries Ltd. said it had a number of rigs in the immediate path of the hurricane. The company has confirmed that all rigs on various sites on the Outer Continental Shelf are in place and appear to have sustained little or no damage, although, as of yesterday, personnel hadnot yet been able to board most of the rigs to complete detailed assessments.

Nabors' deep drilling barge rig 300, which was operating in inland waters just east of Cameron, Louisiana was submerged but remained on station and sustained water damage to the electrical, power, mud pump and other systems. The rig will be moved to a shipyard as soon as possible for repairs and the company hopes to have it back in service within weeks.

Nabors also had five Jackup rigs in Sabine Pass with at least two sustaining damage; a cursory inspection of the other rigs indicates little to no damage. The Dolphin 111 had windows in the pilot house and quarters blown out, resulting in water damage to control systems and the quarters. The mast on Jackup rig 54 was blown over but the company has a substitute mast available and should be able to return the rig to service in a few weeks as well. There is a possibility that some damage was been incurred to components of other rigs stored at a yard proximate to the Port of New Iberia that incurred flooding, but our Nabors' nearby offices are dry and still functioning.

Nabors land operations had nearly forty rigs proximate the storm's path and has determined that all but one are without any significant damage. The remaining rig, Rig 409 located in Jefferson County Texas, remains inaccessible. However, prior to the storm Nabors had removed all of the engines, mud pumps and electrical distribution equipment from the site and lowered the mast. Although the full extent of any economic loss net of insurance still is not known, Nabors does not expect it to have any material adverse effect on its operating results or financial position.

ROWAN

Rowan Companies, Inc. (NYSE:RDC )said that, in the aftermath of the storm, its jack-up rigs Rowan-Odessa and Rowan-Halifax were not at their pre-storm locations.

In addition, the hull of the jack-up Rowan-Louisiana apparently detached from its legs and is aground offshore Louisiana.

The company was also unable to account for one rig, the Rowan-Fort Worth, via a high-altitude aerial survey conducted Sunday.

Each ofRowan's other Gulf of Mexico rigs was identified, though an assessment of their condition will depend upon closer inspection. Rowan says it will conduct more extensive aerial surveys as soon as weather conditions allow and will provide an update on the status of its Gulf of Mexico fleet once additional information is available.

The Rowan-Odessa, Rowan-Halifax and Rowan-Louisiana were operating under contracts that provided for total revenues of approximately $210,000 per day. The rigs are collectively insured for an amount that exceeds their aggregate carrying value. The Company does not maintain insurance against loss of revenue.

MORE NEWS STORIES