Noble exercises option for further HHI drillship

Noble Corporation (NYSE: NE) reports that a subsidiary has exercised its first option with Hyundai Heavy Industries Co. Ltd. (“HHI”) for the construction of an additional ultra-deepwater drillship, the third such drillship to be ordered this year subject to the parties executing a definitive construction contract which is expected to occur within the next week.

This increases the company’s number of floating drilling units to 27, of which 15 are dynamically positioned.  The new ultra-deepwater drillship, to be named at a later date, will be constructed on a fixed-price basis at HHI’s shipyard in Ulsan, Korea, with an expected delivery from the shipyard in the second quarter of 2014. Following shipyard delivery, the unit is expected to undergo the customary 90-120 day period for mobilization and acceptance prior to being ready to commence a contract. The unit is uncontracted at this time.

The delivered cost of the new drillship is expected to be $615 million and includes the turnkey construction contract, company furnished equipment, project management and spares, but excludes capitalized interest.  The construction contract contains favorable payment terms that incentivize on-time delivery.  Under the terms of its agreement with HHI, Noble has one remaining fixed-price option for an additional drillship.  The expiration of this remaining option has been extended to August 31, 2011 with delivery taking place in the second half of 2014.

“With the addition of another high specification drillship, Noble continues its strategy of adding rigs with the latest technology, equipment, and capabilities,” said David W. Williams, Chairman, President and Chief Executive Officer, Noble Corporation.  “These HHI drillships, with their true 1,250-ton load path ratings and ability to handle two complete BOP stacks and multiple subsea Christmas trees, will set a new standard for ultra-deepwater operations.  When combined with the two Bully-class rigs and two Globetrotter-class rigs currently under construction, as well as the recently delivered Noble Jim Day, Noble Danny Adkins, Noble Dave Beard, and Noble Clyde Boudreaux, Noble’s ultra-deepwater fleet is becoming one of the finest in the industry.”

As with the two previously announced drillships, this unit will be based on a Hyundai Gusto P10000 hull design and is designed for operations in waters of up to 12,000 feet, although it may be outfitted for less depending on specific contract requirements.  The unit will have DP-3 station keeping abilities, the ability to handle two complete BOP systems, a heave compensated construction crane to facilitate deployment of subsea production equipment and accommodations for up to 210 personnel, in addition to a number of other operational enhancements beyond the shipyard’s base specifications.

March 4, 2011