Seawell to Acquire New Well Service Unit for $50 Million

Seawell Limited has signed a Letter of Intent for the purpose of acquiring a new well service unit (WSU) with Streicher GmbH in Germany. Total capital expenditure for the unit is estimated to approximately US$50 million. The contract includes one unit with option for two additional units.

The new unit which is be based on a Streicher designed modular rig concept, will be delivered in the third quarter 2009. The well service unit is primarily targeted and marketed for operations on platforms on the UK and Norwegian continental shelves.

The modular well services unit is designed to replace many traditional drilling and well intervention services, offering a flexible and standardized concept which provides for a wide specter of services and capabilities, including drilling snubbing, well workover, managed pressure drilling (MPD), easy integration of coil tubing and wireline services and well plugging and abandonment. The new unit facilitates for fast mobilization and demobilization and represents a cost-effective alternative to conventional drilling and well intervention, allowing for increased oil recovery from mature fields. The new modular unit can be used as a stand-alone unit or in combination with existing platform equipment.

The unit will be built in accordance with North Sea regulatory requirements.

Commenting on the acquisition, Seawell's Executive Chairman, Jorgen Peter Rasmussen said, "This new well service unit reinforces and strengthens Seawell's position as a major player in the well intervention industry. The growing number of old and mature fields in the North Sea, as well as diminishing oil reserves, will generate increasing demand for this kind of flexible and cost-effective units."