CATEGORIZED | News

Rowan restarts newbuild jackup construction

Posted on 08 October 2009

 Rowan Companies has announced that it will resume construction of its fourth EXL class jackup at the Keppel AmFELS shipyard in Brownsville, Texas, with delivery expected in the first quarter of 2012.

“In early 2009, we suspended construction of this rig due to liquidity concerns and a weakening jackup drilling market, pending a decision in the third quarter about whether to complete or cancel this rig,” said Matt Ralls, Rowan president and CEO. “We have now decided to resume construction based on substantial positive changes in our liquidly outlook through 2010 and our expectation of generating an attractive return on the $120 million of net capital remaining to complete construction on this rig.”

“We are confident that there will be an increase in demand for very capable, high-specification jackups for deep, difficult wells going forward. Further, we believe the recovery outlook in global oil demand and a potential re-tightening of rig markets will have gained momentum by the time this rig is delivered in 2012,” Mr Ralls said.

In late 2007, Rowan signed construction contracts with Keppel for four EXL (enhanced LeTourneau Super 116E) class jackups. The EXL will employ the latest technology to drill high-pressure, high-temperature and extended-reach wells in jackup markets throughout the world, and will be equipped with a hook-load capacity of 2 million lbs, 70 ft of cantilever reach, 477 ft of leg length, and the mud pumping horsepower to drill up to 35,000 ft. The company’s first three EXL rigs remain on schedule and on budget, with deliveries scheduled for the second, third and fourth quarters of 2010, respectively.

The company estimates that the capital remaining to complete construction of the fourth EXL rig is $120 million, net of approximately $30 million of penalties and excess inventory that would have been incurred if the project had been canceled. The decision to resume construction is not expected to significantly impact the company’s 2009 capital expenditures, which are estimated at $630 million, but will increase expected 2010 capital expenditures by around $50 million to a range of approximately $375-400 million. The company anticipates funding these capital expenditures through available cash and operating cash flows.

Construction also continues on schedule and on budget for Rowan’s second and third 240C jackups, the Ralph Coffman and the Joe Douglas, with delivery of those rigs scheduled for the first quarter of 2010 and the third quarter of 2011, respectively.

Leave a Reply

*

FEATURED MICROSITES


Recent Drilling News

  • 25 November 2014

    Prescriptive Analytics prescribes how to complete wells to maximize production

    "Big data" is taking on a new role in industry, where companies are combining the findings from geology and geophysics with new data collected from advanced technologies...

  • 25 November 2014

    Petrobras completes drilling first appraisal well in Libra Consortium

    Petrobras recently completed drilling the first appraisal well in the Libra area, the 3-BRSA-1255 (3-RJS-731), known as NW1. Located in the Northwest portion of the Libra block, in the pre-salt layer of the...

  • 24 November 2014

    Ensign secures contracts for 2 ADR 1500S pad drill rigs in Montney area

    Ensign Energy Services has signed contracts for two of its new ADR 1500S pad drill rigs for a major operator in the Montney area of northeast British Columbia...

  • 21 November 2014

    Statoil cancels Stena Carron rig contract offshore Angola

    Statoil has decided to cancel the Stena Carron rig contract after fulfilling the work commitments in the Statoil-operated blocks 38 and 39 in the Kwanza basin offshore Angola...

  • 19 November 2014

    Stepwise approach guides Statoil’s North American onshore path

    When Statoil entered the North American onshore industry in 2008, it was a non-operator in a joint venture (JV) with Chesapeake in one shale play. Since then, Norwegian-based…

  • Read more news