The contract with EnCana is expect to last approximately 122 days and will be for one deepwater well offshore Nova Scotia The Company has recently announced a letter of intent for a drilling contract in Cuba with Repsol next year in a possible direct continuation for Eirik Raude.
Ocean Rig has entered into a farm out agreement with EnCana to participate in the Weymouth well, with a right to convert to a working interest in the license. Ocean Rig's 22.5 % share of the budgeted cost to drill the well is US $13.5 million and the cost is capped at 120 % of the budget. Ocean Rig has the right to sell its interest.
In order to finance the participation in the Weymouth well, Ocean Rig has completed a fully subscribed equity offering of US $13.5 million at NOK 11 per share with large investors comprising mainly shareholders of the company representing approximately 70% of the existing share capital. The offering is subject to approval by an extraordinary general meeting to be held on November 4th, 2003. Following the general meeting, a book building process open to all shareholders and other investors who put orders into the book, will take place in order to determine the final price and allocation of the offering. Some of the investors who have committed to the initial subscription have already placed conditional orders at prices above the minimum subscription price. These orders will be entitled to preferential allocation in the event of oversubscription in the offering at prices higher than the minimum subscription price. No fee has been paid to the investors who have subscribed at the minimum subscription price.
The Company has also agreed with its bankers an option for Ocean Rig to defer repayment of the December 2003 installment under the syndicated bank loan agreement. Further, Ocean Rig has raised $4 million in a loan from new lenders with maturity in August 2004 for general working capital purposes.
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