|Monday, February 28, 2000
Transocean Sedco Forex Inc. announced today that one of its operating subsidiaries has reached an agreement with Elf Exploration Angola (Elf) to amend the offshore drilling contract on the newbuild semisubmersible Sedco Express. Modifications to the contract pertain primarily to the date for possible early termination due to late delivery of the rig and total expected revenues over the duration of the contract. The date for possible termination of the contract due to late delivery of the rig has been extended from May 28, 2000 to December 28, 2000. The company currently expects delivery of the rig to Elf on or around the middle of 2000. The total expected revenues to be generated over the firm three-year term of the contract have been reduced by $23 million to an estimated $165 million. In addition, the amended contract allows Transocean Sedco Forex to recover a maximum of $3.7 million of the revenue reduction during the initial six-months of the rig's operation through the achievement of minimum monthly performance goals. Also, the company can earn additional revenues during the term of the contract through a performance-based bonus program. The dynamically positioned Sedco Express is one of three newbuild Sedco Express-class semisubmersibles currently under construction by Transocean Sedco Forex Inc. The high specification semisubmersible, which is capable of ultra-deepwater operations in up to 7,500 feet of water, possesses streamlined logistics, extensive mechanization and parallel tubular handling operations, which contribute to improving overall well construction time by an estimated 25%. The rig is currently undergoing thruster installation off the coast of Brest, France and has begun its final shipyard commissioning and equipment testing. The rig's initial drilling assignment is expected to be off the coast of Angola.