The contract is valued at approximately US $222 million including mobilization. Saudi Aramco has an option to extend the contract for one additional year at approximately the same terms.
The contractual commencement date is January 31, 2007. Thule Drilling will incur an additional US $6 - $7 million cost to modify and improve the rig specification to the Saudi Aramco requirements. The total project cost for Thule Power including finance cost, fees and administration up to commencement in a ready to drill mode including Saudi Aramco required modifications, will be approximately US $99 million.
This contract will give an estimated cash capital contribution (or EBITDA) to Thule Drilling of about US $130 million over the fixed contract term after deduction of local withholding tax.
KCA DEUTAG Saudi Arabia Drilling Ltd is the contract holder with Saudi Aramco and will manage and operate the Thule Power as Drilling Contractor / Manager. As a wholly owned subsidiary of Abbot Group plc, KCA DEUTAG is the largest offshore platform drilling contractor in the North Sea, one of the largest international land drilling contractors outside the Americas, and is a world leader in engineering, rig design, construction and operation. It employs over 5,000 people worldwide and has operations in Europe, Russia, the Middle East, Caspian Region, North and West Africa and Asia. The Abbot Group has recently announced the takeover of Songa Drilling, which includes three jack-ups.
KCA DEUTAG, with more than 115 years drilling experience and an exemplary safety and performance record, is well suited to manage the Thule Power.
The amount of time previously report for the upgrades has been extended by three months. The extension of the construction time allows for additional improvements and modifications in accordance with Saudi Aramco s specific requirements, which include well testing equipment, more downhole tools and modifications to the derrick, diverter and mud system. This does also allow for an optimization of plans as the rig's new leg sections will be assembled and installed at Dubai Drydocks. Spud cans will also be produced and installed the same place. This solution is considered to be a safer and improved method compared to what was originally planned. In addition, more time has been allocated to general installation, commissioning and testing.
Although risks of further delays still exist, the Board of Thule Drilling is of the opinion that the revised completion date is achievable, following a thorough review of the revised schedule and plan.
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