Scorpion International, a wholly-owned subsidiary of Scorpion Offshore, received a letter of agreement ("LOA") from two European Majors for the use of the Offshore Vigilant in a drilling program offshore Venezuela. The program includes two firm wells, plus two option wells, with an estimated duration between 240 and 480 days, depending on option declarations. The contract is expected to begin in early June 2010 and has an initial estimated value of approximately $38.0 million not counting the options. The commitment made by the operator within the LOA remains subject to partner and government approval until May 31, 2010.
In early October 2009, the Offshore Vigilant completed the first of two wells for UrdanetaGazprom-1. Gazprom was not in a position to commence operations on the second well and is currently in discussions with the Company regarding the timing of operations on the second well, which is estimated to be at least 5.5 months commencing in continuation of the work described above.
Including this LOA, our backlog as of May 1, 2010 is $677.1 million. This backlog equates to an average contract duration of approximately 1.6 years and an average dayrate of $167,000 for each of the Company's seven units.
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