Santa Fe Awards Contract for Semisubmersibles

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 Friede & Goldman ExD design deepwater semisubmersible drilling rigs plus options for two additional drilling units. The first two rigs will cost approximately $285 million each. The option rigs are priced slightly higher.

Construction of the first rig will commence in May and take approximately 30 months to complete. The second rig is expected to commence 18 months into the construction of the first and is presently scheduled to be completed in 24 months. Any subsequent rigs are expected to begin at 18 month intervals and be completed in 24 months.

The rig design, which optimizes drilling efficiency and construction cost, focuses on development drilling in water depths up to 7,500 feet in moderate environments. The design emphasis is on high capacity and performance capabilities and will provide both dynamic positioning and conventional mooring to the design water depth. The rigs will be outfitted with four highpressure mud pumps and a high capacity mud treatment and storage system. Two separate hoisting facilities provide improved efficiency during the well construction process. The derrick will have capacity to accommodate all of the drilling tubulars including a dedicated landing string and a full string of either 13 3/8", 9 5/8" or 7" casing racked in triples. The enhanced features and ability to reach a drilling depth of 30,000 feet below the seafloor in a highly efficient manner is expected to provide a substantial competitive advantage.

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

Sted Garber, President and CEO commented, "With our new build semis, we are embarking on a program driven by our customers' long term operational requirements. Our semi design seeks the greatest operational efficiency at the lowest possible cost. Our rig will have capabilities matched by a relatively small number of rigs in the world's deepwater fleet. We believe it will be the customers' tool of choice and will enhance shareholder value through a good return and long term earnings growth."