January 18, 2001

Conversion contract for Bender
Under a $24.4 million U.S. Maritime Administration contract, Bender Shipbuilding and Repair, Mobile, will convert the National Defense Reserve Fleet vessel, Cape Bon into a school ship for the Massachusetts Maritime Academy.

Bender will

  • add living quarters and lifesaving equipment for 600 cadets, officers, faculty and crew,
  • expand galley and stores arrangements and
  • provide extra electric generating requirements in an auxiliary machinery room uniquely designed for diesel training.

The conversion will transform the Cape Bon from a conventional general cargo ship into a fully equipped training ship with an initial complement of about 600 persons. The ship's existing steam propulsion plant will be retained. The Cape Bon is presently fitted with modern navigation and communications equipment requiring no modification. An auxiliary machinery space will be created in the Number 4 cargo hold, centered around a new Wartsila 8L20 medium speed, heavy fuel diesel generator. The auxiliary machinery space will be equipped and arranged to simulate a modern diesel propulsion plant and may ultimately be equipped with control systems to permit its use as a diesel simulator.

The Cape Bon, originally built for the Lykes Bros. Steamship Company in 1967 will be renamed Enterprise. The conversion began last month and will be completed in one year. Academy students and instructors anticipate making their first training cruise onboard the Enterprise in the spring of 2002.

The converted vessel will also serve as an auxiliary troopship in the ready Reserve Force, a fleet of 76 militarily useful ships that are a key element of DoD's strategic sealift

Global Marine earnings soar
Global Marine Inc. today reported net income for the year ended December 31, 2000, of $113.9 million, or $0.64 per diluted share, on revenues of $1.0 billion. This compares to net income of $89.5 million, or $0.51 per diluted share, on revenues of $791 million for the year ended December 31, 1999.

For the quarter ended December 31, 2000, the company reported net income of $40.9 million, or $0.23 per diluted share, on revenues of $332 million, as compared to net income of $10.7 million, or $0.06 per diluted share, on revenues of $199 million for the same quarter of 1999.

Chairman,president and CEO Bob Rose said, "Our industry had an eventful year in 2000 as oil and gas prices soared and exploration and production companies stepped up their drilling programs. During 2000, worldwide offshore rig utilization increased to 82% from a year-end 1999 level of 72%. In the Gulf of Mexico, utilization of jackup rigs approached 90%, and dayrates for most classes of these rigs more than doubled."

At Global Marine, seven rigs that had been idled for lack of work returned to service during 2000, and two new ultradeep-water, dynamically-positioned drillships began earning dayrate. By year-end 2000, Global Marine's rig utilization rate had increased to 91% from 71% at the beginning of the year, and the two remaining idle semisubmersible rigs were preparing to begin operations in the first quarter of 2001.

"Our drilling management services segment achieved record levels of activity during 2000," Rose said. "Over the course of the year, we drilled 122 turnkey wells and captured a 65% share of the Gulf of Mexico turnkey market. However, due to a number of difficult wells, this segment's fourth quarter operating profit declined to $2.1 million from $6.2 million for the same period in the previous year." For the full year, drilling management services contributed $21.6 million of operating profit, the third highest level in the company's history.

Commenting on the outlook for 2001, Rose said, "Our business is poised for very strong financial performance in the coming year. Customer budgets are projected to increase an average of about 20% in 2001, with activity in the international markets expected to accelerate as the major oil companies refocus on internal growth opportunities. In addition, the Gulf of Mexico rig market should continue to tighten as the industry drills aggressively to meet the need for new natural gas supplies."

In 2001, Global Marine will also benefit from the full-year contribution of the new drillships placed in service during 2000. The Glomar C.R. Luigs and the Glomar Jack Ryan are state-of-the-art rigs and represent the culmination of a five-year capital investment program to expand the company's deep-water capabilities.

During 2000, Global Marine's capital spending totaled $178 million and was dominated by final construction and commissioning costs of the two new drillships. "With these projects completed," said Rose, "our anticipated capital requirements for 2001 will be reduced by almost 50%."

Nearly half of the company's preliminary capital budget for 2001 is earmarked for rig upgrades to meet growing customer demand for deeper and more highly deviated wells. "These enhancements are expected to generate only minimal unpaid downtime," Rose added.

In answer to concerns about the speculative construction of new offshore drilling rigs in the foreseeable future, Rose said, "Global Marine will not build new rigs on a speculative basis. If and when the market demands new rigs, term contracts will be available to support construction."

New UAE dry dock inaugurated
Arab Heavy Industries,which owned by the Ajman Government, Al-Futtaim Group, Singapore's Keppel Group and other investors, has officially opened its 30,000 dwt dry dock in Ajman, United Arab Emirates.

The Al Zora dry dock actually began operations last November and has already accommodated seven vessels, the largest being a 26,000 dwt bulker.

Built in less than one year at a cost of some $20 million, at 175 m x 32 m the dry dock has a particularly wide beam and can accommodate the latest double-hulled tankers, offshore structures and supply vessels, anchor handlers, crane barges and cargo vessels. It is served by two dockside cranes, 40 tons and 16 tons lift capacity

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