Deep Down, Inc. announced that it has received a Letter of Intent for $9 million from Delba International to supply and install the deepwater marine drilling riser flotation system for the new-build Delba III semisubmersible drilling rig.
The letter of intent is subject to the negotiation of a final purchase order. In addition, Deep Down is currently in negotiations with Delba International to supply and install the flotation system for the new-build Delba IV. Both the Delba III and the Delba IV are rated to drill in 2,400 meters of water but are readily upgradeable to 2,700 meters and have long term contracts to drill in Brazilian waters. The rig set of flotation for the Delba III is scheduled to be delivered in less than one year.
On April 17, Deep Down announced a definitive agreement to purchase all of the outstanding capital stock of Flotation Technologies, Inc. Flotation recently introduced its patent pending CoreTec(TM) drilling riser buoyancy modules, which Deep Down believes can become the industry standard for ultra deepwater applications. Subject to completion of this acquisition, it is expected that the drilling riser flotation systems to be provided under the Delba letter of intent will be manufactured by Flotation Technologies in Biddeford, Maine. Deep Down will handle installation of the drilling riser buoyancy.
"Our reputation for the service we provide in managing the installation of subsea hardware and flowlines is excellent. As a result of this reputation and the desire to source products and services from a smaller number of vendors, our customers are increasingly asking us to supply the products we install. We believe Flotation Technologies offers a superior, technologically-advantaged buoyancy product for deepwater applications. This order evidences the synergies achievable with our relationships in the industry," commented Ronald E. Smith., Deep Down's President and CEO.
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