Skeie Drilling & Production Signs Letter of Intent for 1 Jackup Newbuild

Skeie Drilling & Production ASA (SKDP) has signed a letter of intent with Skeie Energy AS for the lease of one of the three jackup newbuilds under construction at Keppel FELS Shipyard in Singapore.

A firm drilling contract is supposed to be signed within July 1, 2008 (the latest effective date). SKDP shall in the period until the effective date have the option to nominate either the first or the second rig to be provided for this contract. The first rig is scheduled to leave the yard in 1st quarter 2010 while the 2nd rig is scheduled for early 3rd quarter 2010. Heavy lift transportation has already been arranged from Singapore.

The term of the contract will be three years and the value of the contract is approximately 470 MUSD including mobilization fee. Until September 30, 2008 Skeie Energy can elect to extend the firm contract period up to five years. Skeie Energy shall also have the option to extend the contract period with up to two optional extension periods, each with twelve months duration independent of whether the firm contract period is three years or more.