USA: Atwood Oceanics Exercises 1st Jack-Up Rig Option with PPL Shipyard

Atwood Oceanics., a Houston-based international drilling contractor , announced today that on January 14, 2011, Atwood Oceanics Pacific Limited (“AOPL”), a wholly-owned subsidiary of Atwood Oceanics, Inc., exercised the first of three options and executed a turnkey construction agreement to construct a third Pacific Class 400 jack-up drilling unit with PPL Shipyard PTE LTD (“PPL”).

As with the October 5, 2010 announcement, this rig will have a rated water depth of 400 feet, accommodations for 150 personnel and significant offline handling features. The total cost, including project management, drilling and handling tools, spares and capitalized interest, will be approximately $190 million and is scheduled for delivery on June 30, 2013. Financing for the construction of this rig is expected to be provided from a combination of ongoing cash flows of AOPL and debt, as necessary, from AOPL’s current senior credit facilities. The Company will consider whether any additional debt may be necessary in connection with fleet expansion.

Upon delivery, this rig will become the fourteenth mobile offshore drilling unit owned by the Company group. AOPL and PPL have remaining option agreements for up to two (2) additional Pacific Class 400 jack-up drilling units which require AOPL commitment by June 30, 2011 and December 31, 2011, respectively. No determination has been made at this time whether any of the two (2) remaining options will be exercised.

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.”

Source: Atwood, January  20, 2011; Image: PPL

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