Ensco plc has entered into a five-year term drilling contract with BP for the new ENSCO DS-6 (UDW drillship) at a rate of approximately $522,000 per day, plus cost adjustments. The contract adds more than $1 billion to Ensco's revenue backlog. In addition, the contract includes two one-year options at mutually agreed rates.
ENSCO DS-6 recently was delivered from Samsung Heavy Industries' shipyard in South Korea and is now undergoing BP requested and funded modifications in Singapore that include BP's latest enhanced voluntary drilling standards. Ensco has been receiving a special standby day rate from BP since February 1 while this work is being completed. The scope and total cost of these modifications and upgrades are in the process of being finalized.
Chairman, President and Chief Executive Officer Dan Rabun commented, "We are very pleased that BP has chosen to contract ENSCO DS-6. BP is a repeat customer of our Samsung DP3 drillship series and we commend our crews currently working for BP for their safety record and operational performance, which favorably influenced the contracting for ENSCO DS-6."
"ENSCO DS-6 increases the size of our active ultra-deepwater fleet to 10 rigs and reinforces Ensco's position of having the newest ultra-deepwater fleet in the world with an average age of just two years," added Mr. Rabun.
Upon completion of the modifications, the rig will mobilize to its first well location to complete acceptance testing before commencing drilling operations. The mobilization fee will be paid by BP in a lump sum upon completion of acceptance testing.
Based on current estimates, ENSCO DS-6 is scheduled to commence the five-year term contract in late fourth quarter 2012. Collectively, the modifications, mobilization fee and special standby day rate will be amortized over the primary five-year contract term.
ENSCO DS-6 is the fourth of five rigs in the Company's Samsung DP3 drillship series. Ensco anticipates significant benefits from standardization for these rigs as it has with the ENSCO 8500 Series® ultra-deepwater rigs, Megathyst semisubmersibles and Keppel FELS premium jackups.
The Samsung DP3 ultra-deepwater drillships are equipped with advanced technological features for drilling deepwater wells including DPS-3 certified dynamic positioning, six ram 15,000 psi BOPs, two million pound hook load, 6,000-barrel active fluid systems, significant storage and deck space, and accommodations for up to 200 persons. The BOP for the ENSCO DS-6 drillship will have double-blind shear rams to meet BP's specifications.
The uniform design of the company's Samsung DP3 drillship series streamlines construction, operations, inventory management, training, regulatory compliance, repairs and maintenance. It also provides flexibility for customer-specific enhancements: in particular, the drillships may be modified to drill and complete wells in water depths up to 12,000'.
ENSCO DS-7, the fifth rig in the Company's Samsung DP3 drillship series, is currently under construction in South Korea with delivery scheduled for the second half of 2013.
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