Santa Fe To Go Ahead With Newbuild Projects
Santa Fe International Corporation announced that its Board of Directors has authorized the construction of two deepwater semisubmersibles and up to four high performance jackup drilling rigs. The authorization is contingent upon successful negotiation of contracts for construction of the rigs which meet the parameters and conditions established by the Board.
The Company anticipates that the rig building program will be funded through existing cash balances plus cash flow to be generated over the program's duration; however, the Company may borrow some of the required funds if conditions warrant. While definitive construction schedules have yet to be agreed, both the semi program and the jackup program will have approximately the same start date and are expected to proceed simultaneously with follow-on jackup construction starting at twelve month intervals and the second semi starting approximately eighteen months after the first. It is anticipated that the first jackup will be delivered in late 2002 and the first semi in late 2003.
Construction of two deepwater semisubmersibles, designed primarily for development drilling in up to 7,500 feet of water in benign environments, begins to fulfill Santa Fe's often stated goal of extending its recognized expertise in floating drilling to the deepwater arena. These new rigs will be outfitted to achieve the most efficient and cost effective performance possible in drilling multiple well, deepwater development programs. Santa Fe owns and operates three semis currently equipped to drill in up to 2,400 feet of water and operates, in the Caspian Sea, two additional semis owned by Santa Fe's partner in the Caspian Drilling Company joint venture.
The planned jackup program anticipates an increasing requirement for high performance jackups capable of drilling deeper and more difficult wells in various areas of the world. The new rigs will have the approximate drilling capability of Santa Fe's heavy duty harsh environment jackups and will be capable of drilling in 350 to 400 foot water depths in benign areas. These rigs will be equipped with 75 foot extended reach cantilevers, 7500 PSI pumps, and large volume mud storage and deck load capacity available on only a handful of jackups in the world fleet. Though the rigs are not initially being equipped for work in the central North Sea, they will be capable of working in harsh environments in up to 300 to 350 feet of water depending on specific site assessments.
Sted Garber, Santa Fe's President and CEO states "We are very enthusiastic about the value that will be created by the newbuild program. We believe we are in the early stages of an upturn which will support demand for additional premium offshore rigs in the world fleet and that the timing and scope of this program are very prudent for Santa Fe. We have proved in the past and believe firmly that the most advantageous costs of new construction can be obtained early in the cycle. We also have a record of completing new construction projects on time and on budget. With no debt, $300 million of cash and strong cash generating capability, Santa Fe is in a unique position to be able to take advantage of early cycle pricing enhanced by multiple rig orders. Based on discussions with our customers regarding the capabilities of our new rigs, we expect that these rigs will be under contract prior to delivery."
Sted Garber will discuss the newbuild program and Richard Hoffman, Vice President, Investor Relations, will update the rig fleet contract status during the Company's first regular Mid-Quarter Conference Call on Wednesday, December 13, 2000, at 10:00 AM CST/11:00 AM EST.
To participate, you must obtain the teleconference dial-in telephone number prior to the day of the call by dialing 1-800-289-0579, reference code 735323. The conference call will also be webcast live (listen only) via Santa Fe's website, http://www.sfdrill.com or http://www.videonewswire.com/SANTA/121300/.
Replays will be available immediately following the conference call on Santa Fe's website or by telephoning 719/457-0820, reference code 735323, starting at 1:00 PM CST on the day of the conference call. Both services will discontinue replays at 7:00 PM CST December 20, 2000.
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Santa Fe International Corporation is a leading international offshore and
land contract driller. The Company owns and operates a high quality,
technologically advanced fleet of 27 marine drilling rigs and 33 land drilling rigs and is a provider of drilling related services to the petroleum industry.