Pride International is continuing the expansion of its deepwater fleet, following a multi-
year contract award from a subsidiary of Petroleo Brasileiro S.A. (Petrobras) for the construction and operation of an advanced-capability, ultra-
deepwater drillship in support of Petrobras's international exploration and development drilling projects. The ultra-deepwater drillship, to be built at the Samsung Heavy Industries, Co. Ltd. (SHI) shipyard in Geoje, South Korea on a fixed-price basis, is expected to be delivered from the shipyard in the first quarter of 2011, following construction, commissioning and system-integrated testing.
The multi-year drilling contract allows Petrobras to elect, by January 31, 2010, a firm contract term of at least five years and up to seven years in duration. The drilling contract provides for the payment of a fixed daily rate and the payment of a performance bonus of up to 17% of the fixed daily rate if a five year term is selected (or up to 15% if a six or seven year term is selected.) Depending on the firm contract term chosen and excluding revenues for reimbursement of costs associated with the mobilization of the rig to an initial location, estimated contract revenues which could be generated range from $916 million to $1.24 billion and include the operating dayrate, the full amount of the performance bonus and other contractually guaranteed payments of $41 million to $49 million. In addition, a cost escalation provision is provided from the signing date of the contract through the term selected.
Louis A. Raspino, President and Chief Executive Officer of Pride International, Inc., stated, "This third addition to our deepwater fleet in less than seven months, along with the supporting contract, is beneficial in a number of ways as we continue to successfully transition the company to a pure offshore focus with an increasing emphasis on ultra-deepwater drilling. These benefits include:
Expanding our strong business relationship with Petrobras, a client with increasing opportunities in deepwater exploration and development drilling around the world.