Aker Exploration Lines Up Newbuild Semisub

Aker Drilling ASA

Aker Drilling ASA and the offshore exploration company Aker Exploration AS have entered into an agreement on a tentative three-year drilling contract for the world's largest and most advanced drilling unit. Pursuant to the Heads of Agreement signed, Aker Exploration is paying US $10 million to reserve the drilling unit through December 2006.

Aker Drilling and Aker Exploration have agreed on the commercial terms and conditions of the aforementioned drilling contract for a semisubmersible sixth-generation drilling unit of the Aker H-6e design. The contract period runs from October 2008 until October 2011. Aker Exploration has an option to extend the contract for an additional two years. The operating area of the drilling unit during this contract will be the Norwegian Continental Shelf.

The day rate for the three-year contract period is US $520,000. The possible total contract value amounts to approximately US $610 million, or NOK 3.8 billion. The contract includes a total of US $41 million in reservation payments, mobilization costs, and customer-specific modifications. Aker Exploration is paying US $10 million to reserve the rig through December 2006.

Aker Drilling is planning to invest approximately US $70 million to meet customer-specific modifications and for equipment and outfitting, risers, and anchoring systems, to increase the rig's deployment flexibility.

"Aker Drilling is experiencing significant interest in the company's two identical sixth-generation drilling rigs currently under construction," says Aker Drilling President and CEO Geir Atle Sjoberg. "Demand for deepwater drilling units is strong in an active rig market, and these factors are reflected in the agreed contract price."

The charter agreement is for Aker Drilling's rig that is to be ready for field operation in October 2008; i.e. the second rig in the construction series. Delivery of the first drilling unit is scheduled for February 2008.

"Several tenders and discussions are in progress for the first drilling rig. Such discussions were ongoing prior to this fall's negotiations with Aker Exploration," says Sjoberg.

Aker Drilling's two semi-submersible Aker H-6e drilling units are specially designed for drilling in ultra-deep waters, harsh environment and in cold climates, and will with the rigs' Aker Kvaerner MH Dual RamRig drilling systems provide excellent operations efficiency to the clients.