ENSCO Announces Joint Venture to Build New Jackup Rig
ENSCO International Incorporated announced that one of its principal subsidiaries ("ENSCO") has agreed upon terms for a joint venture with Keppel FELS Limited to acquire, for $26.25 million in cash and project management services, a 25% ownership interest in a new high performance premium jackup rig to be constructed by Keppel FELS in Singapore, and expects to execute and deliver definitive agreements shortly. The rig, to be named the ENSCO 106, will be an enhanced KFELS MOD V (B) design, modified to ENSCO specifications, capable of addressing more demanding applications on a global basis. The enhanced design will be designated as the "BIGFOOT" ™.
The total agreed cost of the rig will be approximately $105 million. In addition to its initial 25% ownership, ENSCO will have an option to purchase the remaining 75% interest in the rig prior to delivery and for two years after delivery. The option price will be based on the agreed cost until rig delivery, and thereafter will be subject to modest escalation during the two-year option period. Following delivery, which is expected in the first quarter of 2005, ENSCO will market, manage and operate the rig under charter from the joint venture.
Carl Thorne, ENSCO's Chairman and Chief Executive Officer, commented on the transaction, "This joint venture with Keppel FELS is in keeping with our commitment to improve our presence in the premium jackup market in a very disciplined and conservative manner, much as we have done with the ENSCO 102 joint venture. The ENSCO 106 will address the heart of the premium jackup market in a cost effective manner, similar to our philosophy with the ENSCO 7500 semisubmersible rig relative to the deepwater market. As drilling requirements become more stringent and fleet renewal becomes imperative, we believe balance between capability and cost will be crucial. We are confident that the BIGFOOT ™ design will optimize our philosophical criteria, and are most pleased that Keppel FELS has again agreed to be our partner in this project. ENSCO's initial 25% ownership in the rig will limit present exposure, and the purchase option will continue to offer the flexibility to add to the capability of our jackup fleet, at a very attractive cost, while continuing to reduce the average age of our overall fleet."
Manages 64 Offshore Rigs
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