PDVSA Takes Control of Ensco 69 Jackup, Contract Discussions Ensue

Ensco has announced that Petrosucre, a subsidiary of the Venezuelan national oil company PDVSA, has assumed control of drilling operations on ENSCO 69 in Venezuela in an ongoing dispute over Petrosucre's non-payment of past due invoices under a drilling contract for the ENSCO 69 jackup drilling rig.

When Petrosucre failed to honor recent commitments to pay past due amounts, Ensco suspended drilling operations upon completion of the well in progress pending payment of past due amounts. Petrosucre resumed ENSCO 69 drilling operations under observation by Ensco supervisory rig personnel, with Petrosucre employees and some of the Venezuelan rig crews that were utilized by Ensco. Petrosucre has advised Ensco that it temporarily is taking over operations on the rig and that Ensco is free to terminate the contract and remove the rig.

Senior representatives of Ensco and Petrosucre currently are engaged in discussions and exchanging correspondence regarding their respective contractual rights and obligations.

Dan Rabun, Chairman, President and Chief Executive Officer of Ensco, commented, "We have a long history of successful operations in Venezuela and have maintained a strong working relationship with PDVSA over many years. We remain committed to providing the same standard of safe and reliable services to PDVSA as we have in the past, and we are hopeful that the situation involving ENSCO 69 soon can be resolved to the mutual satisfaction of Petrosucre and Ensco."

ENSCO 69 commenced its current contract with Petrosucre in August 2008. The contract calls for a two-year term at a day rate in the mid- $180,000 range. Currently, the total receivable balance is approximately $35.5 million. The rig is insured for $65 million.

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