Standard Drilling Inks LOI with UMW Petropipe

Standard Drilling

Standard Drilling has entered into a Letter of Intent ("LOI") with a wholly-owned subsidiary of the UMW Group, UMW Petropipe (L) Ltd regarding ownership, marketing and operation of two jackup rigs.

The parties expect to conclude the agreements (share sale and purchase Agreement in respect of the ownership companies, a Joint Venture Agreement, Shareholder Agreement and Management Agreements in respect of the operations of the jackup rigs) before year end 2006. UMW Petropipe (L) Ltd intend to own 51% of rig number 1 (L201) with scheduled delivery in August 2008 and 51% of rig number 3 (L203) with scheduled delivery in June 2009. The average transaction value of the two rigs is estimated to be about US $176.5 million per rig (100%).

UMW Holdings Berhad is a leading public-listed company in Malaysia with over 10,000 employees. The core business of the company include support and service for the Oil and Gas sector with presence in Malaysia, China, Thailand, India, Vietnam, Australia, Turkmenistan and Dubai. Their major clients include international oil companies, including Petronas, Malaysia's national oil company. Further, the core business of UMW Holdings Berhad is manufacture/assembly and distribution of Toyota and Perodua (collaboration with Daihatsu Motor Corporation of Japan) motor vehicles and components in Malaysia. The company also distributes Komatsu, Bomag and Case heavy equipment and Toyota forklifts in several Asian countries.