October 29, 2008
$1.17 billion drilling contract for Transocean newbuild drillship
Transocean Inc. (NYSE:RIG) today announced that a five-year contract has been executed with a client for a previously announced ultra-deepwater newbuild drillship equipped for drilling in up to 10,000 feet of water depth, upgradable to 12,000 feet of water depth with additional equipment, and constructing wells up to 40,000 feet total depth.
The rig was listed in the Transocean Fleet Update Report dated August 5, 2008, along with nine other announced ultra-deepwater newbuild units, as the "HHI Drillship TBN (to be named).''
The five-year drilling contract is expected to commence in the fourth quarter of 2010, following shipyard construction. The contract commencement date is contingent on vendor performance and other factors. Contracted revenues related to the five-year contract term are approximately $1.17 billion to $1.19 billion, depending on countries of operation during the contract term. Estimated contract revenues represent the maximum amount of revenues that may be earned, excluding revenues for cost escalations, customer reimbursed equipment and miscellaneous adjustments.
Construction of the unnamed dynamically positioned, double-hull drillship is scheduled to take place at the Hyundai Heavy Industries shipyard in Ulsan, South Korea, with the first steel cutting scheduled in January 2009. The estimated total capital expenditure for the drillship, is approximately $740 million, excluding customer reimbursed equipment and capitalized interest. The rig design is an enhanced version of Transocean's C.R. Luigs and Jack Ryan-class drill ship designs. It will feature Transocean's patented dual-activity drilling technology, allowing for parallel drilling operations designed to save time and money in deepwater well construction, compared with conventional rigs. It will also feature a third load path through a 165-metric-ton Active Heave Compensating Crane for subsea construction activity. The rig will also have expanded completion capabilities and a variable load of 20,000 metric tons.