Prosafe Wins Nigerian Contract for Safe Caledonia

Prosafe Rigs Limited, a wholly owned subsidiary of Prosafe ASA, has been awarded a contract for SNEPCO (Shell Nigeria Exploration & Production Company) for the use of Safe Caledonia for DP (dynamic positioning) hook-up/construction support to the FPSO Bonga in Nigeria. Safe Caledonia will continue the service that MSV Regalia is carrying out under a six-month contract until June 2004, when the latter will be mobilized to the North Sea prior to the Troll contract for Statoil.

The contract for the Safe Caledonia has a fixed duration of 12 months, with start up in the first half of June 2004. The client has in addition further 4 x 1 month options. The options must be declared three months in advance. Prosafe's direct mobilization costs in connection with the move of the Safe Caledonia to Nigeria will also be covered by the client.

Total contract value for the period from April 19, 2004 until the end of the contract in June 2005 is about US $37 million, inclusive a US $5.8 million contribution related to the transit from East Timor to Nigeria and demobilization, but exclusive of options.

This contract confirms Prosafe's belief in a stronger market for service and accommodation rigs in the coming years, based on an increase in both geographical opportunities and demand drivers.

Prosafe concluded in 2003 the upgrades and modifications of its rig fleet in connection with the five-year contracts in Mexico and subsea well intervention. This contact will give the company the opportunity to also upgrade the Safe Caledonia from DP1 to DP2. This will give the rig a greater flexibility, which is important because the demand for DP-operations is expected to increase in the future, e.g. in connection with support to FPSOs, which by their own constitute a market with long-term growth opportunities. In total, this will further increase the fleet's quality and competitive edge. The upgrade to DP2 will be performed while the rig is being moved from East Timor to Nigeria, and will cost about US $9 million.

With this contract, Prosafe's rig fleet is secured a total fleet utilization of about 89% in 2004. Thereafter, the fleet is secured an utilization of about 69% for 2005, 62.5% for 2006 and 2007, and about 30% for 2008.