|Tuesday, November 16, 1999
Oceaneering International, Inc. has been awarded a contract to provide a mobile offshore production unit (MOPU) for development of the Legendre North and South oil fields in WA-1-P on the North West Shelf of Western Australia. Participants in the Legendre fields are Woodside Energy Ltd., Apache Northwest Pty. Ltd., and Santos Limited. Oceaneering will convert its jackup Marine 7 to serve as the Legendre MOPU. The contract is a dayrate services arrangement with a primary term of three years. The oil company participants have announced that they anticipate production to commence by mid-2001. Assuming the project is completed on schedule and within budget, Oceaneering expects to realize incremental earnings of $0.30 per share annually during this primary contract term. The Company intends to fund the estimated capital cost of $80 million through cash flow from operations and its existing revolving credit facility. Within the first year of production, the participants can extend the primary term to five years. They also have multiple options to extend the contract beyond the primary term for a total duration of up to ten years. The Company has agreed to offer the MOPU for sale at any time after the first year of production. However, Oceaneering does not expect the participants to acquire the MOPU during the primary contract term. John Huff, Chairman and CEO, stated, "I am extremely pleased to announce this innovative solution, which underscores Oceaneering's dedication to expand its strategy of providing niche market technologies. We believe this contract represents the culmination of a very creative approach by both Oceaneering and the Legendre Participants in forging a mutually beneficial relationship. Equally important, this contract will enhance our presence in Australia and provide us the opportunity to grow our local operations in mobile production, subsea tieback, and conventional support services."