Varco Awarded Supply Contract

Varco International (NYSE:VRC) announced the signing of a supply contract in excess of $25.0 million with Hyundai Heavy Industries for a full suite of drilling systems on the new build Maersk XL1.

The rig package contains the newest technology in drilling equipment and consists of Varco's complete line of automated pipe handling and solids control equipment as well as Varco's new AC Drawworks and an AC topdrive. Also included is an 18 inch NXT BOP stack and a complete computer based VICIS control system. This is Varco's first complete jackup package that incorporates a drawworks. The scope of the contract includes interface with a third party derrick supplier, full project management of the project supply and supervision of installation and commissioning. Five divisions of Varco are included in the contract, Varco Systems, Varco BJ, Shaffer, M/D Totco and Brandt Rigtech.

George Boyadjieff, CEO and chairman of the board of Varco International, explained the critical features of the industry's most advanced drilling system to date: "This contract includes state-of-the-art automation of the machinery and systems with a full e-drill(TM) ready suite of equipment and drilling network. The planned automated functions include the centrifuges, shakers and rig floor systems."

"The integration of these advanced systems with the Internet will allow the operator to remotely control rig operations from their desktop," he continued. "We are entering a new world of drilling operations."

Varco International Inc. is the world's leading manufacturer and supplier of innovative drilling equipment and rig instrumentation, oilfield tubular inspections and internal coating techniques, solids control systems and services, and coiled tubing and pressure control equipment for both land and offshore.