Keppel FELS has signed a contract to build two proprietary KFELS B Class jackup rigs worth US $360 million with Asia Offshore Drilling (AOD), a 49% owned affiliate of Mermaid. This follows a Letter of Intent entered into by Keppel FELS and Mermaid on October 22, 2010.
The two jackup rigs are scheduled for delivery in 2012 and 2013 respectively.
As part of the contract, AOD has been given options to build another two similar jackup units. If exercised, the options for the additional two rigs will bring the total contract value to above US $720 million.
Mr. Chandchutha Chandratat, Executive Chairman of Mermaid Maritime, said, "This latest contract represents a significant order from an Asian drilling company, and is in line with Mermaid's goal to be a long-term owner of high specification modern drilling assets in the region.
"I am pleased to announce that the response from investors in the recent equity placement exercise conducted for the two rigs was most encouraging. With that, we have been able to put in place the necessary funding for our new fleet expediently.
"This reflects the market's confidence in Mermaid's capabilities as an operator, and in our choice of partnering Keppel FELS, the world's leading offshore rig designer and builder, to construct the proven KFELS B Class jackup rig design."
Mr. Tong Chong Heong, CEO of Keppel Offshore & Marine and Keppel FELS, said, "We would like to thank Mermaid for their confidence in Keppel FELS, and are very pleased to take our partnership to the next level with the building of two new KFELS B Class jackup rigs.
"At Keppel FELS, we have supported and grown with all our customers over the years, many of whom have become today's market leaders. It is with the same passion and commitment that we look forward to support Mermaid in developing its premium rig fleet and operational track record in the region."
The KFELS B Class jackup design is developed by Keppel's technology arm, Offshore Technology Development. When completed, AOD's rigs will be able to operate in water depths of 350 feet, drilling depth of 30,000 feet and accommodate 150 men.
An impressive number of 37 KFELS B Class rigs has been ordered to date. This includes the two units from Mermaid, and one from Standard Drilling Ltd that was secured last week.
As at the time of this media release, the total value of new contracts secured by Keppel O&M Group in 2010 has grown to more than S$2.7 billion.
The new contract with AOD is not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year.
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