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November 15, 2010

Seadrill and Transocean order jack-ups

Two offshore drillers are showing enough faith in prospects for jack-ups to take out their check books. Seadrill is following up its recent drillship splurge at Samsung by ordering two newbuild two jack-ups at China's Dalian Shipbuilding Industry Offshore Co., Ltd. with orders for two more. And Transocean is buying an under-contruction jack-up units from Singapore's PPL Shipyard.

The two newbuilds ordered in China by Seadrill are based on the Friede & Goldman JU2000E design, and are suitable for operations world wide, including the southern North Sea. They have the capability to operate in water depths up to 400 ft and drill to depths of 30,000ft. They are scheduled for delivery in the fourth quarter 2012 and first quarter 2013 respectively, and total project cost is estimated at $380 million, which include project management, drilling and handling tools, spares and capitalized interest.

Seadrill Management CEO Alf C Thorkildsen says,"We expect market and conditions for premium jack-up rigs to continue to improve. These newbuild orders position our company to meet the demand from our customers and further strengthen our position as the leading operator of modern, high quality offshore drilling units. Our jack-up rig fleet will, including the recent acquisition of Scorpion and the two recently ordered rigs from Jurong, constitutes the world's largest modern jack-up fleet with a total of 18 units built after 2006."

The unit that Transocean Ltd. is buying from Sembcorp Marine subsidiary PPL is a PPL Shipyard design Pacific Class 400 capable of operating in water depths up to 400 feet and constructing wells 30,000 feet deep. It is set for delivery in the fourth quarter of 2011 and Transocean is paying $195 million for it.

"Our decision to purchase this unit reflects our belief in the strengthening fundamentals of the high-specification jackup market and our strategy to increase our participation in this part of our business," said Steven L. Newman, Chief Executive Officer of Transocean Ltd. "The one-year delivery schedule gives us sufficient time to pursue a number of opportunities available in the marketplace to secure an attractive contract for the rig."


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