A wholly owned subsidiary of Chiles Offshore LLC has entered into an agreement with Keppel FELS shipyard in Singapore to build a KFELS MOD V "B" design, cantilevered jackup drilling rig. The total construction cost is estimated not to exceed $110 million, including equipment furnished by the owner. The KFELS MOD V "B" is a proprietary design owned by KEPPEL which has been modeled on the MOD V "harsh-environment" jackups and will be delivered with a leg length between 475' and 545'. Mr. C.B. Choo, the Chairman and Managing Director of KEPPEL commented: "this order marks the launch of a new rig design intended to ultimately replace the generation of jackups built in the 1970's. The MOD V platform, jacking systems and their configuration incorporate modern engineering concepts that improve productivity, enhance safety, and provide added independence from supply lines and environmental conditions. We are very pleased to expand our existing relationship with Chiles Offshore." Mr. William Chiles, the Chief Executive Officer and President of CHILES added: "our goal is to augment our position in the Ultra-Premium, deep-water jackup market niche. We believe, in the next three to five years the demand for high productivity jackups will increase. The new rig will embrace digital technology and state-of-the-art information and communication systems." The subsidiary will be funded by a bank loan and new equity, which will be invested by its parent company. CHILES recently took delivery of two Ultra-Premium, deep-water jackup rigs, the Chiles Columbus and the Chiles Magellan which were built at AMFELS in Brownsville, Texas. AMFELS is a wholly owned subsidiary of KEPPEL. CHILES, furthermore, recently bare-boat chartered the Tonala from Perforadora Central S.A. de C.V. of Mexico. CHILES is 58.3% owned by SEACOR SMIT Inc., a New York Stock Exchange listed company. CHILES is a provider of contract drilling services to the worldwide offshore oil and gas industry.