Parker Lands BP Contract to Construct Rig for Alaskan Drilling

Parker Drilling Company has announced a new contract to construct, deliver and commission a land-based rig for BP to drill ultra extended-reach wells to offshore targets in the Liberty field of the Alaskan Beaufort Sea.

Drilling will occur from an existing satellite pad that is part of BP's Endicott oil field. The rig will be owned by BP, and drilling is anticipated to start in 2010.

Although the Liberty field is nearly six miles offshore, the rig's ultra extended-reach drilling capability will enable development of the field with the least environmental impact, as the wells will produce directly into existing facilities without the need for an offshore platform, artificial drilling island or sub-sea pipeline.

The ultra extended-reach wells, guided by 3-D seismic imagery, will extend nearly two miles deep and as far as eight miles out, some with measured depths exceeding the current record.

The construction and commissioning contract with BP is the second phase of the Liberty field development project. Parker anticipates that gross margins through phase two will be in the $14 - $18 million range. Phase one was a technical service project awarded to Parker Drilling in 2006 by BP to provide a conceptual design for the purpose-built rig.

Robert L. Parker Jr., Parker Drilling's chairman and chief executive officer, said, "Backed by 40 years of arctic drilling expertise and record-setting performances, Parker's drilling solutions are enabling our customers to unlock exploration and development opportunities previously classified as inaccessible due to their remote locations, harsh climate conditions, environmental concerns and complex geological formations.

"To conquer these barriers, we leveraged our arctic and extended-reach drilling technologies to design one of the world's most sophisticated land rigs, designed to operate in temperatures down to -50 degrees F and featuring a state-of-the-art equipment package which reduces emissions, noise and personnel hazards; increases fuel efficiencies and reliability; automates drilling processes and enhances power delivery.

"These features enable development in a safe, effective and environmentally conscious manner," Parker continued.

"The Liberty project is the newest addition to our Alaskan operations, which also include two Parker-owned newbuild land rigs for a development drilling program for BP on the North Slope beginning in 2010. The Alaskan market is an excellent fit with our strategic plan, with long-term growth potential and a niche for our technologically advanced capabilities," Parker concluded.