Ensco plc (NYSE:ESV) has entered into a drilling contract for the newbuild ultra-deepwater semisubmersible drilling rig ENSCO 8504 with French operator Total (NYSE:TOT) in Brunei. Delivery from the shipyard in Singapore is planned for the end of July 2011, and the contract commencement will follow sea trials and mobilization to Brunei.
Chairman, President and Chief Executive Officer Dan Rabun commented, "We are very pleased that Total has chosen ENSCO 8504 for its drilling program. Our ENSCO 108 jackup drilling rig currently is working for Total in Brunei and we appreciate the opportunity to expand our relationship with our latest 8500 Series rig. Brunei is an emerging deepwater basin and we look forward to entering this market with one of our deepwater rigs for the first time.”
The initial contract term is for drilling three exploration wells for a minimum of 180 days with a base day rate of $423,500. Total may extend the term by exercising up to four options. The first two options may be exercised to complete up to three additional wells at the same day rate. The third and fourth options may be exercised to complete up to six additional wells at an escalated day rate. The fee for rig mobilization from Singapore to Brunei is $3.5 million.
When ENSCO 8504 commences operations later this year, it will become the sixth ultra-deepwater rig in the active fleet. Ensco’s other deepwater rigs are contracted in Brazil, the U.S. Gulf of Mexico and French Guiana. Two additional ENSCO 8500 Series® rigs are under construction with deliveries scheduled in the first and second half of next year.