Atwood Hunter Lands Work from Burullus Offshore Egypt

Atwood Oceanics reports that the Atwood Hunter has been awarded an additional contract by Burullus Gas Co. to drill two firm wells off the coast of Egypt, which is estimated to take 270 days to complete. This contract requires that the rig be upgraded to include the capability of drilling high pressure wells (15,000 P.S.I.). The cost of the required equipment upgrade is estimated to be approximately $8 million (including approximately $5.0 million of equipment previously acquired but excluding rig time necessary to effect the upgrades), with equipment installation estimated to take approximately 30 days to complete. The equipment upgrade will commence immediately upon completion of the rig's current drilling program with Burullus (estimated September 2005). The contract provides for a dayrate of $62,400 during the upgrade period (estimated 30 days), an upgrade fee of $1.5 million payable at the completion of the equipment upgrade period, an operating dayrate of $125,000 during the drilling of the two firm wells (estimated 270 days), and a demobilization fee of $500,000 if the rig has no immediate ongoing work upon contract completion.