Deep Down Reels in $11.1MM Buoyancy Contract for Delba III

Deep Down has received an executed $11.1 million contract from Delba Drilling International Cooperatie U.A. to supply and install the deepwater marine drilling riser flotation system for the new-build Delba III semisubmersible drilling rig.

The original letter of intent, initially estimated at $9 million, was received May 23, 2008. The increase in the value of the contract is reflective of engineering changes to satisfy additional lift requirements. The Delba III semisubmersible drilling rig is rated to drill in 2,400 meters of water and is readily upgradeable to 2,700 meters. The Delba III has long-term contracts to drill in Brazilian waters. The rig set of flotation for the Delba III is scheduled to be delivered by early 2010.

The manufacturing requirements under the Delba III contract will be managed by Flotation Technologies, a Deep Down subsidiary. The installation of the drilling riser flotation system will be managed by Deep Down (Delaware), also a Deep Down subsidiary.

Delba International has secured financing for the construction of the Delba III semisubmersible drilling rig. Deep Down is now focused on achieving a successful contract execution on the Letter of Intent for the Delba IV semisubmersible drilling rig, which was announced on June 6, 2008.

"Significantly, Delba International recognizes the benefits of our innovative, newly-engineered deepwater flotation system which provides greater durability at even greater depths," commented Ronald E. Smith, Deep Down's president and chief executive officer. "This innovation is embodied in our patent-pending CoreTec(TM) drilling riser buoyancy modules, a product of Flotation Technologies, for the offshore drilling industry. The CoreTec(TM) drilling riser buoyancy modules provide a more durable, longer lasting, and cost effective buoyancy solution for our customers."

"We chose Deep Down to satisfy our buoyancy requirements on the Delba III for two principle reasons. We believe the highly engineered CoreTec(TM) modules provide a superior and cost-effective solution with its demonstrated durability and longevity at ultra high ocean depths. A second, and equally important consideration, is Deep Down's long-standing reputation for providing exemplary installation services of all types of equipment in offshore operations at any depth," commented Drilmar Monteiro, Delba Drilling International Cooperatie U.A.

"We anticipate continued use of this solution in our Brazilian operations, as we have a significant backlog of rigs all requiring an effective and durable buoyancy solution for deepwater operations."

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