Noble Corp. orders two ultra-deepwater drillships from HHI for $1.2B

By Phaedra Friend Troy

Offshore drilling contractor Noble Corporation (NYSE:NE) has signed a contract with Hyundai Heavy Industries for the construction of two ultra-deepwater drillships for a combined cost of $1.21 billion.

"We believe the fundamentals of the global ultra-deepwater market will continue to be strong in the decade ahead," said David Williams, chairman, president and CEO of Noble Corporation. "These units, capable of meeting the industry's most stringent operating requirements, further support our continued commitment to increasing the technological and operational capabilities of our fleet. Furthermore, the previously announced Letter of Intent from Shell for one unit reduces the speculative risk and enhances future shareholder value."

To be named at a later date, the drillships will be built at HHI’s shipyard in Ulsan, Korea, with deliveries slated for the second and fourth quarters of 2013. Operations are expected to commence 90 to 120 days after delivery.

For $605 million each, the drillships construction costs include turnkey construction, equipment, project management and spares, but excludes capitalized interest. Additionally, the contract includes payment terms that incentivize on-time delivery.

With water ratings up to 12,000 feet deep, the rigs will be based on the Hyundai Gusto P10000 hull design. Additionally, the drillships will have DP-3 positioning capabilities, a heave compensated construction crane to allow subsea installations, the ability to handle two complete BOP systems and accommodations for up to 200 crewmembers.

The drillships will bring Noble’s rig fleet to 26 floating rigs, 14 of which are dynamically positioned.

Additionally, the contract includes an option for a further two ultra-deepwater drillships, which must be declared by May 2011 for delivery in 2014.

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