Pride Goes Drillship Shopping

Pride International has acquired an ultra-deepwater drillship currently under construction at the Samsung Heavy Industries Co., Ltd. (SHI) shipyard in Geoje, South Korea. The drillship is being constructed on a fixed-price basis, with an expected delivery date during the first quarter of 2010. Pride acquired the drillship from Lexton, Inc., an affiliate of the Tanker Pacific group of companies.

The rig is Pride's second ultra-deepwater drillship project with the yard. The expected construction cost of the drillship is an estimated $675 million, which includes $108.5 million to be paid to Lexton at closing, commissioning and system integrated testing. The company expects to fund the cost of the rig through available cash and borrowings against its revolving credit facility.

"This acquisition is consistent with our stated strategy to invest in premium, offshore drilling assets, with a particular focus on deepwater. When combined with our recently announced drillship construction project and acquisitions of our partners' interests in two deepwater joint ventures, we have now invested or committed over $2 billion toward our deepwater growth strategy," said Louis A. Raspino, president and chief executive officer of Pride International, Inc.

Raspino added, "Strong global demand for energy and attractive commodity prices are fueling our customers' continued growth in exploration and development spending. As a result, we are highly confident that the favorable conditions in the deepwater sector will persist for quite some time, producing attractive opportunities for deepwater drilling rigs, especially ultra-deepwater rigs of this caliber.

"Furthermore, un-contracted ultra-deepwater rig capacity under construction and with an expected delivery prior to the first quarter of 2010 has declined to four units. In light of continued deepwater rig capacity constraints, we believe the planned first quarter 2010 delivery of this drillship will be valuable in meeting the future needs of our clients, and, accordingly, should produce excellent contracting prospects,'' said Raspino.

The drillship is based on an SHI proprietary hull design measuring 750 feet long, 140 feet wide and offering a variable deck load of 20,000 metric tons. The rig will be capable of operating in water depths of up to 10,000 feet and drilling to a total vertical depth of 40,000 feet. In addition, the rig will feature dynamic positioning station-keeping with DPS-3 certification, expanded drilling fluids capacity and a 1,000 ton top drive. The drillship will be initially equipped for drilling in water depths of up to 7,000 feet.

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