Keppel FELS delivers one jack-up, books orders for more

Singapore’s Keppel FELS Limited has started the year with the delivery of one jack-up rig and an order for two more. The delivered rig was the Rowan Stavanger, the second of three KFELS N-Class rigs being built for Rowan Companies, Inc. (NYSE: RDC).The new orders come from Clearwater Capital Partners, LLC and are for a pair of premium KFELS B Class with options for two more.

The KFELS N-Class has been designed and equipped for demanding drilling requirements in harsh weather environments, including the Norwegian market.

The proprietary design of Offshore Technology Development (OTD), Keppel’s R&D arm, the KFELS N-Class rig is able to operate efficiently in some of the harshest offshore environments in the world. The design is in full compliance with the demanding and technically challenging requirements of rigs operating in the Norwegian sector of the North Sea.

At 568 feet (extendable to 598 feet) this jack-up unit can operate in severe weather conditions in water depths of 400 to 500 feet, which are 40 percent deeper than traditional units in benign waters. It is also able to drill to depths of 35,000 feet, which is 15 percent deeper compared to existing harsh environment jack-up rigs.

Rowan President and CEO Matt Ralls, said, “Our acquisition of Skeie Drilling and Production and three high-specification KFELS N-Class rigs in the third quarter of 2010 has strengthened Rowan’s market-leading position worldwide for jack-ups with hook-load capacities of two million pounds or more while providing us with the additional capacity to meet our customers’ stringent operating requirements for their most challenging wells.

“Our first KFELS N-Class jack-up, the Rowan Viking, is expected to commence a 19-month assignment in the UK sector of the North Sea with Total UK in March 2011. The Rowan Stavanger is yet another outstanding product of the talent and hard work demonstrated by the Keppel FELS and Rowan project teams. The high-spec KFELS N-Class rigs are among the most capable jack-ups in the world and we are very pleased to add them to the Rowan fleet.”

Equipped to provide customers with the flexibility of undertaking drilling and production concurrently, the high-specification KFELS N-Class rig has features that allow drilling to take place at two positions 26 feet apart. This special design allows the jack-up to accept process modules for production activities while having concurrent drilling activities at the secondary cantilever position. The two cantilever drilling positions also provide an exceptionally wide drilling envelope.

Construction of the third KFELS N-Class rig at Keppel FELS, which is to be named the Rowan Norway, is on schedule with expected delivery in the second quarter of 2011.

In the U.S., the Keppel AmFELS shipyard in Brownsville, Texas, has successfully delivered three of four Rowan EXL-Class jack-up rigs (Enhanced Super 116E) to Rowan safely, on time and within budget. The fourth EXL-Class rig is presently under construction with expected delivery in the first quarter of 2012.

NEW ORDERS

The new orders from New York headquartered Clearwater Capital Partners, LLC are for a pair of premium KFELS B Class jackup rigs at US$360 million.The two high specification jackups are scheduled for delivery in 1Q 2013 and 2Q 2013 respectively. As part of the agreement, Clearwater has options to build another two similar jackup units with Keppel FELS. If exercised, the options for the additional two rigs will bring the total contract value to above US$730 million.

Clearwater Capital Partners, LLC is an investment firm founded in December 2001 and dedicated to investing in special situations across Asia, excluding Japan.

Commenting on the orders at Keppel FELS, Mr. Rob Petty, Managing Partner and Co-Founder of Clearwater, said, “Confidence is rapidly returning to the offshore industry and we expect a fundamental recovery of the sector. There is a clear bifurcation in the jack-up market with oil companies increasingly focused on new, high specification rigs for their projects. We have followed this market closely and chose Keppel FELS as our long term partner to help us execute our investment plans in the transition of the jack-up market from old rigs to safer, more efficient rigs.

“Keppel FELS is the gold standard for quality, engineering, and building execution in terms of both time and budgets,” continued Mr. Petty. “Our wide ranging due diligence before placing these substantial orders consistently validated the Keppel team to be professional – from the initial discussions through the engineering design and contract placement. We look forward to this same degree of professionalism and precision all the way through to delivery.”

Mr. Wong Kok Seng, Managing Director of Keppel FELS, said, “We thank Clearwater for their confidence in Keppel FELS and look forward to nurture a win-win partnership with them.

“The KFELS B Class design is the industry standard for efficient and high grade performance; to date, 33 such units have been delivered for operations in various parts of the world. I am confident that when completed, the KFELS B Class jackups will provide outstanding value and returns on Clearwater’s investment.”

When completed, Clearwater’s rigs will be able to operate in water depths of 400 feet, drilling depth of 30,000 feet and accommodate 150 men.

January 24, 2010