ENSCO has finalized a drilling contract with Cobalt International Energy, L.P. for the ENSCO 8503, an ultra-deepwater semisubmersible rig currently under construction. The drilling contract calls for operations in the Gulf of Mexico on a two-year primary term that can be extended to a three or four year term by Cobalt.
The aggregate day rate revenue for the base two-year contract term is expected to be approximately $372 million. The base operating rate is $510,000 per day, and the day rate will be subject to adjustment for variances in operating costs from January 2008 levels. ENSCO will be reimbursed for rig mobilization to the Gulf of Mexico and any special equipment upgrades requested by Cobalt. Delivery of ENSCO 8503 to Cobalt is currently anticipated in late 2010 or early 2011.
ENSCO 8503 is the Company's fourth ENSCO 8500 Series(R) ultra-deepwater semisubmersible rig currently under construction, and will be part of the Company's six-rig deepwater fleet that includes the ENSCO 7500 deepwater semisubmersible rig that has been in service since 2000. Four of the 8500 Series rigs are under construction by the Keppel FELS Limited Shipyard in Singapore and are now contracted to customers for term work commencing upon delivery. The Company recently announced Board approval for construction of an additional new rig to be known as ENSCO 8504 and marketing of this rig is underway.
Daniel W. Rabun, ENSCO's Chairman, President and Chief Executive Officer, commented: "We are pleased that Cobalt International has selected ENSCO for its deepwater drilling program in the Gulf of Mexico. This demonstrates confidence in our ability to provide first-class rig crews, superior service and safe operations, and recognizes that the ENSCO 8500 Series(R) rig design offers a cost-effective deepwater drilling solution to efficiently address Cobalt's drilling requirements."
Joseph H. Bryant, Cobalt's Chairman and Chief Executive Officer, commented: "Securing ENSCO 8503 provides Cobalt with the latest drilling technology to prove the prospectivity of our substantial acreage position in one of the most prolific exploration basins in the world. Cobalt looks forward to working with ENSCO to rapidly execute a safe yet focused drilling program across our Gulf of Mexico portfolio."
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