Parker Drilling Company announced that a subsidiary of BP PLC has issued a Letter of Intent to a Parker subsidiary for a drilling contract that will require two newbuild land rigs for a development drilling program in Alaska.
A five-year drilling contract, with a five-year option, is expected to be executed by the end of the month. Operations are anticipated to commence during the second half of 2010, following construction and mobilization to the North Slope.
Revenues related to the project are expected to be in excess of $250 million during the initial five-year term, including mobilization fees and customer-reimbursed equipment.
David C. Mannon, Parker Drilling's president and chief operating officer, said, "Parker has a 40-year history of cutting-edge arctic drilling technology. Our record-breaking performance for the Sakhalin-1 consortium and for numerous other arctic exploration programs makes Parker the most qualified partner for frontier exploration projects.
"These rigs are designed to reduce the total well cost for the customer through faster well times and mobilization while reducing the environmental impact, true to our strategic plan of providing a fleet of advanced rigs preferred by our customers in all market conditions."
The new arctic-class rigs incorporate some of the most advanced features available in the global land rig market, including:
-- Safety-engineered state-of-the-art equipment package, which reduce vibration, noise, and personnel hazards;
-- Rigs designed from targeted benchmark well data incorporating technology to decrease well times resulting in increased number of wells per year;
-- On-board command center centralizing decision-making processes;
-- Fully automated drilling system featuring fuel-efficient AC technology and variable frequency drive, substantially reducing emissions, automating the drilling process and enhancing power delivery;
-- Fully enclosed rig modules for operation in arctic conditions down to -50degreesF;
-- Design composed of three lightweight Drilling, Mud and Utility modules, enabling the entire rig to be moved in only three loads, resulting in increased mobility and faster rig-up;
-- Offline pipe handling, enabling faster well times;
-- Zero-discharge capabilities and reduced loading on roads and drill sites, reducing overall environmental impact.
The Company anticipates financing a portion of the cost of the two newbuild rigs with a new senior credit facility that will provide for an $80 million revolving credit facility and a new $50 million term loan. The Company expects to receive commitments from existing and new banks that will comprise the lenders to the new senior credit facility by mid-May 2008.
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