Rowan exercises option for fourth UDW drillship

Rowan P10000SEPTEMBER 10, 2012 —Rowan Companies plc has exercised its option to build a fourth GustoMSC P10,000 design ultra-deepwater drillship with South Korean shipbuilder Hyundai Heavy Industries Co., Ltd. Delivery is scheduled in March 2015. The agreement with HHI also includes an option for a similar fifth drillship exercisable in the fourth quarter of 2012, for delivery in the third quarter of 2015.

Rowan says that the fourth drillship will cost it about $620 million, including commissioning, project management and spares, but excluding capitalized interest, is estimated to be approximately $620 million. That's about 6 percent more than each of the first three drillships primarily due to equipment price increases and projected labor cost increases.

Rowan says this cost compares to peer companies' previously announced 12,000 foot capable rigs equipped with 10,000 feet of riser.  Rowan plans to equip its drillships with 2,000 feet of additional riser to enable operations in water depths up to 12,000 feet upon delivery.  Each drillship will also be equipped with a second BOP for minimizing non-productive time.  Rowan will also incur operational training and personnel ramp-up costs in readying the drillships to commence well operations.  Expected costs for the additional riser, BOP and training and ramp-up costs will be approximately $75 million.  

Matt Ralls, President and Chief Executive Officer, commented, "We are very pleased to add a fourth ultra-deepwater drillship to our fleet.  The recent three-year contract obtained for our first drillship, the Rowan Renaissance, and strong customer enthusiasm for Rowan's history of operational excellence, high-specification drillship design and experienced deepwater team, reaffirms our confidence in our expansion into the ultra-deepwater market."

The Rowan Renaissance is expected to be delivered from the shipyard in late 2013.  The second and third drillships are expected to be delivered in the second and fourth quarters of 2014, respectively.

Want more? Subscribe now!

News from NASDAQ