Leiv Eiriksson's Sea Trials Take Longer Than Expected

Ocean Rig's first rig, Leiv Eiriksson, has now started the final customer defined acceptance program. During this program Ocean Rig will be compensated to a maximum of USD 1,875,000. The remaining portion of the acceptance test program includes deepwater testing of the BOP in 6,500 feet of water in the Gulf of Mexico, further testing of the dynamic positioning systems and other system tests. Installation of customer defined equipment is essentially completed. The rig will commence mobilization to West Africa upon completion of the acceptance test program and drilling operations on the first well is estimated to start early December.

Leiv Eiriksson's sea trials have lasted longer than anticipated. The company has experienced problems during testing of equipment and systems, which in turn has led to increased costs. As a result, the investment on this rig will increase by approximately USD 20 million compared to budget. The increase consists of replacing needed equipment and related man-hours. Daily operating costs as well as financing costs for the period of solving the problems will come in addition. These extra costs will not be refunded by ExxonMobil.

As a consequence of increased costs, Ocean Rig will require additional funding. The company's board and administration is currently considering various solutions. For this purpose, the brokerage house Pareto Securities ASA has been retained to act as financial advisor.


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