Atwood exercises jack-up option at PPL Shipyard

Sembcorp Marine subsidiary PPL Shipyard has signed another turnkey contract to build a jack-up rig with Atwood Oceanics Pacific, a wholly-owned subsidiary of Atwood Oceanics Inc. (NYSE ATW). Priced up to US$182 million, the jack-up rig has been ordered under the first of three options that the Singapore shipyard granted Atwood in October 2010, when it ordered two jack-ups.

Like the units ordered in October, the latest rig will be a Pacific Class 400 jack-up will have a rated water depth of 400 feet, accommodations for 150 personnel and significant offline handling features. Delivery is scheduled for June 30, 2013.

Atwood says the total cost, including project management, drilling and handling tools, spares and capitalized interest, will be approximately $190 million.

Atwood and PPL have remaining option agreements for up to two additional Pacific Class 400 jack-up drilling units that require commitments from Atwood by June 30, 2011 and December 31, 2011, respectively.

Rob Saltiel, Atwood President and CEO, commented, “Our decision to exercise this option reflects continued confidence in the Pacific Class 400 rig design and our satisfaction thus far with the construction progress of our first two rigs at the PPL shipyard. In addition, we believe that by committing early in the build cycle, Atwood has procured these three high-specification jack-ups at an attractive price.”

Dr Benety Chang, Deputy Chairman of PPL Shipyard said “We are pleased that Atwood Oceanics has chosen to exercise this first option granted by PPL Shipyard. This contract reaffirms the confidence in the jack-up rig market and in particular for high specification premium quality drilling rigs.”

January 20, 2011