ENSCO Enters Into JV With Keppel FELS

ENSCO International Incorporated announced that it has entered into a joint venture with Keppel FELS Limited through which ENSCO will acquire, for $30 million in cash and management and procurement services, a 25% ownership interest in a new harsh environment jackup rig that is currently under construction.

The rig, an enhanced KFELS MOD V design (an upgraded version of the ENSCO 101 completed earlier this year) has been under construction at Keppel FELS' shipyard in Singapore since March 2000. The new rig, to be named the ENSCO 102, will be capable of working in water depths of up to 350 feet in the North Sea, and water depths in excess of 400 feet in milder environments such as the Gulf of Mexico or Southeast Asia.

The total agreed cost of the rig will be approximately $130 million, with delivery anticipated in early 2002. ENSCO will have an option to purchase the remaining 75% interest in the new rig until two years after delivery. The option price will be based on the agreed cost until rig delivery, and thereafter will be subject to modest escalation in each of the two years remaining in the option period. Following delivery, ENSCO will manage the rig for the benefit of the joint venture, until the earlier of the second anniversary of the delivery of the rig or the exercise of ENSCO's purchase option.

Carl Thorne, ENSCO's Chairman and Chief Executive Officer, commented on the transaction, "This joint venture with Keppel FELS is in keeping with our commitment to carefully and intelligently increase our presence in the premium jackup market. As this rig is already under construction, we will not be adding to overall supply, while still enhancing our market leadership position. The arrangement also allows us to expand our relationship with one of our most significant preferred vendors, Keppel FELS. Our initial 25% ownership in the rig will limit present exposure, while the purchase option will continue to offer the flexibility to add to the top end of our jackup fleet at a very attractive cost."


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