Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today announced that one of its subsidiaries has been awarded five-year drilling contracts for two newbuild high-specification jackup rigs for operations offshore Thailand for a subsidiary of Chevron Corporation (NYSE: CVX).
The five-year drilling contracts are expected to commence during the first quarter of 2013 and third quarter of 2013, respectively, following shipyard construction and mobilization. The contract commencement dates are contingent on vendor performance and other factors.
The estimated contract revenues are fixed for the first three years and may be adjusted for the last two years. The estimated revenues which could be generated over each five-year contract term, assuming the fixed rate in effect during the first three years continues during the fourth and fifth years of the contract terms, are approximately $246 million for each rig, excluding revenues for mobilization, demobilization, and miscellaneous adjustments.
One of Transocean's subsidiaries has executed a shipyard contract with Keppel FELS to build both of the high-specification Super B Class jackups. Construction is scheduled to take place at Keppel FELS' yard in Singapore. The combined capital cost for the two rigs is estimated to be approximately $400 million, excluding capitalized interest. Transocean has options to order three additional high-specification jackup rigs.
The jackup rigs, which are Keppel FELS's latest proprietary design, will be capable of operating in water depths up to 350 feet and constructing wells 35,000 feet deep. The rigs will feature the most advanced offshore drilling technology, including offline tubular handling features and simultaneous operations support. In addition, the rigs will have accommodation for 150 personnel.