NOVEMBER 21, 2013 — Ensco plc (NYSE: ESV) is extending its ENSCO 120 Series of ultra-premium harsh environment jack-up rigs with the order of ENSCO 123 for delivery in second quarter 2016. The rig will be built under a fixed-price shipyard construction contract with Keppel FELS Limited in Singapore. Including commissioning, systems integration testing and project management, the construction cost is expected to be approximately $285 million.
The shipyard construction price for the rig is approximately $265 million.
The contract with Keppel FELS includes an option for one additional rig of similar design.
Ensco Chairman, President and CEO Dan Rabun stated, "The customer response to our ENSCO 120 Series rigs has been overwhelmingly positive. The first three rigs in the series were contracted well ahead of their delivery dates to three separate customers – each of whom recognizes the advantages of our proprietary design, in particular our patented cantilever technology. We and our customers also benefit from the advantages of standardization, namely operational efficiency, inventory management and training programs. We are already in discussions with customers about multi-year programs for ENSCO 123 and follow-on programs for the other ENSCO 120 Series rigs."
Mr. Rabun added, "This new investment is consistent with our strategy of adding rigs with unique technology that distinguishes Ensco from its competitors and provides superior returns on investment. We now have seven rigs under construction that will grow earnings and cash flow well into the future."
Scheduled for delivery in second quarter 2016, ENSCO 123 will be the fourth ENSCO 120 Series jack-up rig that Ensco has ordered from Keppel FELS since 2011.
Mr Tong Chong Heong, Chief Executive Officer of Keppel O&M, said, "We are pleased that Ensco, which has the largest fleet of premium jack-up rigs in the world, continues to expand its fleet of harsh environment jack-up rigs with Keppel FELS. It marks the strength of our reputation for providing proven rigs that are the best in class.
"Customers come to us because we have the experience and expertise to come up with solutions that can meet their needs. We are able to stay ahead of the competition because we have the R&D resource and execution capabilities to deliver customized and differentiated rig designs that are high performance, cost efficient and reliable. We are encouraged that established drilling contractors such as Ensco continue to value rigs of quality and the Keppel promise of on-schedule project execution."
The ENSCO 120 Series rigs are based on the KFELS Super A Class, which is an enhancement of the proven KFELS MOD V-A Class jack-up and features its proprietary and superior jacking and fixation system that has a perfect track record operating in a variety of environments. To date, over 2,800 jacks designed by Keppel FELS' Offshore Technology Development unit have been installed in the jack-up rigs built to KFELS' proprietary designs.
Keppel FELS delivered the first ENSCO 120 Series jack-up, ENSCO 120, earlier this year. It has been chartered to Nexen and is about to begin work in the North Sea. ENSCO 121 and ENSCO 122 are also contracted for multi-year terms in the North Sea following delivery from Keppel FELS.
"The Ensco patented cantilever system, strong jacking system, and deep well capabilities of the ENSCO 120 Series rigs, paired with our skilled crew's knowledge and experience, are a winning combination for our customers," said Mr. Rabun.
"When developing a new series of rigs, we believe in choosing a winning design and standardising it to achieve greater efficiencies," added Mr. Rabun. "Having looked at shipyards around the world, we have always come back to Keppel over the years because of their ability to consistently provide industry-leading rig designs in a timely and reliable manner."
The ENSCO 120 Series rigs can operate in water depths of 400 feet and drill to depths of 40,000 feet. It features advanced automated drilling systems with 2.5 million pounds of static hook load, a spacious deck and comprehensive amenities for the comfort of a 145-person crew. It also has an offline stand building capability to handle drill pipes efficiently, boosting overall rig performance and productivity.
For enhanced operational safety, the rigs are equipped with the latest pinion overload detection, rack phase difference detection, and brake failure and overload protection devices, thus meeting even the stringent Health, Safety and Environment (HSE) standards of various sectors in the North Sea.