Helmerich & Payne, Inc. has plans to construct eleven additional FlexRigs to operate under long-term contracts for three exploration and production companies. The Company has signed three-year term contracts to operate four new FlexRigs in the U.S., and has also signed letters of intent to operate the remaining seven new FlexRigs in Latin American locations.
The four new FlexRigs to operate in the U.S. are scheduled to be deployed in the Barnett Shale during this year's third fiscal quarter. Two of these new land rigs will be working for Quicksilver Resources Inc. and two for Carrizo Oil & Gas Inc. The seven new international FlexRigs are scheduled to be completed and mobilized at the rate of one per month beginning in the fourth fiscal quarter of 2008. The Company expects to finalize contracts for these seven new international rigs with the customer within the next thirty days. Five of the seven rigs are expected to operate under five-year term contracts and the remaining two under three-year term contracts.
The four new FlexRig commitments in the U.S. and the seven international FlexRigs subject to letters of intent bring to 94 the total number of long-term new build orders announced since March 2005. Similar to the previously announced new build contracts, the Company projects attractive returns on the investment required for these new operations. Of the 94 new FlexRigs, 80 have already been completed bringing the current number of FlexRigs in the Company's fleet to 129. Including all 94 new build orders, FlexRigs are expected to represent almost 70% of the Company's global land fleet by the end of calendar 2008.
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