TODCO has signed a two-year drilling contract for its drilling rig, THE 205 with PEMEX in Mexico. Dayrates for the two-year contract with Pemex will be adjusted quarterly principally based on the published United States Gulf of Mexico dayrates for 200-foot mat-supported cantilevered rigs plus $20,000. The contract is scheduled to commence in late October 2007, however, it could start earlier pending completion of ongoing repairs.
The rig is currently in a shipyard in Veracruz, Mexico where it is undergoing leg and helideck repairs as a result of an incident that occurred in December 2006 when a cargo vessel struck the rig. Total costs for the rig repairs and tug costs while the rig was standing by to be towed into the shipyard for repairs are estimated to be about $8 million. We have filed suit against the cargo vessel owner and are attempting to recover these costs from the vessel owner.
Jan Rask, President and Chief Executive Officer, said "We are pleased with the signing of this contract for THE 205 and the opportunity to continue our relationship with Pemex."
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