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Pride awarded multi-year deepwater drilling contracts from Petrobras, BP

Posted on 05 February 2008

The drillship for Petrobras, to be constructed at the Samsung shipyard in South Korea, is expected to be delivered in early 2011. It will be the third addition to Pride’s deepwater fleet in less than seven months.

The contract allows Petrobras to elect, by 31 January 2010, a firm contract term of at least five years and up to seven years.

Deepwater exploration and development activity continues to be supported by impressive geologic success and strong energy demand outlook well into the next decade," said Louis A Raspino, Pride president and chief executive officer. "Technological advancements continue to enable the industry to achieve drilling successes in challenging deepwater environments, resulting in promising new geologic plays, the emergence of new deepwater regions and expansion of the customer base.

"Each of these factors buttresses our high level of confidence in the long-term duration of the present deepwater cycle and in our ability to realize attractive contracting opportunities for our two ultra-deepwater drillships already under construction, while building our resolve to pursue additional deepwater growth opportunities."

The new drillship, to be named at a later date, is Pride’s third ultra-deepwater drillship construction project, following previously announced decisions in 2007 to construct one unit and to purchase from another party a second unit in the early stages of construction. Like the first two drillships, the latest unit is based on an SHI proprietary hull design 750 ft long, 140 ft wide and offering a pay load in excess of 20,000 metric tons. The drillship is designed for drilling in water depths of up to 12,000 ft, with a total vertical drilling depth of up to 40,000 ft, and will have off-line tubular stand building capabilities. The rig will feature dynamic positioning in compliance with DPS-3 certification.

The rig, which will be initially equipped for drilling in water depths of up to 10,000 ft, will also have expanded drilling fluids capacity, a 1,000-ton capacity top drive and living quarters for up to 200 personnel. The expected construction cost of the rig, including commissioning and system integrated testing and excluding capitalized interest, is approximately $720 million.

BP CONTRACT

BP’s contract, expected to commence during the third quarter of 2010, is for Pride’s advanced capability, ultra-deepwater drillship scheduled for delivery during the first quarter of 2010. That unit is in the early stages of construction also at the Samsung shipyard.

Following the rig’s arrival, the company will have a presence in the world’s three established deepwater drilling regions — Brazil, West Africa (Angola) and the US Gulf of Mexico.

The rig will be capable of drilling in water depths of up to 12,000 ft (equipped for 10,000 ft) and drilling to a total vertical depth of up to 40,000 ft, while offering a variable deck load of 20,000 metric tons, dynamic positioning in compliance with DPS-3 certification, expanded drilling fluids capacity, a 1,000-ton capacity top drive and living quarters for up to 200 personnel. The rig is being modified from the original design to improve on its already-extensive off-line operational capabilities. Primary to these modifications is the addition of a 160-metric ton active-heave compensated construction crane that allows the rig to perform subsea construction activities, such as the placement of production trees and manifolds in up to 10,000 ft of water without obstructing the critical path of drilling deepwater wells, an additional 3,000 feet of marine riser and a corresponding increase in riser tensioning capacity. Including the modifications to the rig’s technical features, commissioning and system-integrated testing, the company has revised the estimated cost to construct the rig to approximately $730 million, excluding capitalized interest, and expects to fund the construction of the unit with available cash and borrowings.

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