Santa Fe Chooses A Shipyard

Santa Fe International Corporation announced that a Letter of Award has been executed with PPL Shipyard PTE, Ltd. of Singapore for the construction of two JU 2000 design high performance jackup rigs. The rigs will cost approximately $125 million each. The agreement includes options for additional jackup units, the first two of which are at a similar price.

Each jackup rig will take approximately 24 months to complete. Construction of the second rig will begin approximately 12 months into construction of the first unit.

The planned jackup newbuild program anticipates an increasing demand for high performance jackups capable of drilling deeper and more difficult wells. The new rigs will have the approximate drilling capability of Santa Fe's Galaxy class heavy duty harsh environment jackups and will be capable of drilling in up to 400 foot water depths in moderate environments. These rigs will be equipped with 75 foot extended reach cantilevers, three 7500 psi, 2200 HP mud pumps, and a large mud storage and deck load capacity available on only a handful of jackups in the worldwide fleet. The rigs will be capable of working in harsh environments in up to 300 to 350 foot water depths depending on specific site assessments, and will be marketed on a worldwide basis.

As previously announced, Santa Fe also plans to add two newbuild deepwater semisubmersible rigs to its fleet. Negotiations with several short-listed shipyards are ongoing and a construction contract award is expected later this quarter.

The Company anticipates that the rig building program will be funded through existing cash balances plus cash flow to be generated over the duration of the program; however, the Company may borrow some of the required funds if conditions warrant.

Santa Fe International Corporation is a leading international offshore and land contract driller. The Company owns and operates a high quality, technologically advanced fleet of 27 marine drilling rigs and 33 land drilling rigs and is a provider of drilling related services to the petroleum industry.