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Seadrill Lines Up Gig for West Mira Semisub

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Seadrill receives award for newbuild ultra-deepwater semisubmersible West Mira with start-up in 2015.

Seadrill has received a Letter of Award from Husky Oil Operations Limited for a new five-year contract for the newbuild harsh environment rig West Mira (UDW semisub) for operations in Canada and Greenland. Total estimated revenue potential for the contract, including mobilization and performance bonus is approximately $1.18 billion for the five firm years. The West Mira is currently under construction at the Hyundai Samho Shipyard in South Korea and delivery is scheduled for 4Q 2014. Upon delivery from the yard the rig will commence transit to the east coast of Canada. Start-up of operations is estimated during 2Q 2015. The West Mira is designed for drilling in harsh environments and water depths up to 10,000 feet. The unit will be equipped with DP-3 (dynamic positioning) as well as 12 point mooring capability, potential for two six ram blowout preventers and along with 1,000 ton load path capacity.

The West Mira represents one out of ten semisubmersible rigs in the Seadrill fleet capable of operations in harsh environments, eight of which have been delivered since 2008. Seadrill has another harsh environment newbuild, the West Rigel, of similar design as the West Mira, which will be delivered in 1Q 2015 from the Jurong shipyard in Singapore that is currently still available for contract.

"The West Mira will be the second rig Seadrill will operate in Eastern Canada. This award is the result of the reputation for safe and efficient operations that Seadrill has developed within the offshore drilling industry. After enjoying a safe and successful drilling campaign with Husky Energy in China with the West Hercules, we are pleased that Husky has chosen to extend that relationship with a contract for a newbuild offshore Eastern Canada," Chairman of Seadrill Limited John Fredriksen said.

"The award of a five-year contract with commencement in 2015 is also a clear sign of the present tightness in the harsh environment / deepwater drilling market. Seadrill currently have several options / proposals to increase the newbuild program within this field further. Based on close discussions with our customers we also see several additional attractive long-term chartering opportunities. A decision regarding further investment within this segment is likely to be taken shortly and might also include direct investments from North Atlantic Drilling Ltd.," Fredriksen continued.

In line with the omnibus agreement terms and conditions between Seadrill and Seadrill Partners, Seadrill is obligated to offer the West Mira to Seadrill Partners at a fair market price. Such a deal represents one of many attractive opportunities to secure aggressive profitable growth and potential dividend distribution increases in the newly established Seadrill Partners.

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