Pride International, Inc. (NYSE: PDE) announced that the company has reached agreement with Samsung Heavy Industries, Ltd. (SHI) for the construction of a fifth ultra-deepwater drillship, further expanding the company's ultra-deepwater fleet size and drilling capabilities.
Consistent with the company's previous four ultra-deepwater drillships ordered since 2007, the new unit will be constructed on a fixed price basis at the SHI shipyard in Geoje, South Korea, with an expected delivery in mid-2013. The rig will be equipped with some of the most technically advanced well construction features available in the offshore drilling industry, addressing a suite of superior capabilities to meet the needs of our clients, including advanced systems for hoisting, blow out preventer handling, drilling and mud controls and station-keeping.
Louis A. Raspino, President and Chief Executive Officer of Pride International, Inc., commented, "The long-term outlook for the deepwater drilling sector is expected to remain fundamentally strong, supported by a continuation of record geologic success, increased expansion by clients into new emerging locations, growing preference by many clients for the industry's most advanced, efficient and safe drilling rigs, a continuing shift toward field development programs, new technologies that improve the recovery rates from deepwater reservoirs and an environment of sustainable crude oil prices that is supported by growth among numerous global economies. Given the long-term visibility afforded by these sector attributes, we are increasingly confident that additional deepwater capacity will be required by our clients as we advance through the next decade."
The new drillship, to be named at a later date, is based on an SHI proprietary hull design measuring 750 feet long and 140 ft wide. The rig is designed for drilling in water depths of up to 12,000 ft, with a total vertical drilling depth of 40,000 ft, and will offer a pay load in excess of 20,000 metric tons and a 1,250 ton hoisting system. The rig's design and capabilities, which includes a dual derrick, allow for numerous well construction and field development activities that can be performed in parallel, producing increased rig efficiencies. Primary to these capabilities are offline tubular stand building features and a 160-ton automated heave compensating construction crane, allowing for the deployment of subsea production equipment without interference with ongoing drilling operations. The rig, which will be initially capable of drilling in water depths of up to 10,000 ft, will be equipped with dynamic positioning in compliance with DPS-3 certification, six-5.5 megawatt thrusters for enhanced station-keeping capacity, expanded drilling fluids capacity, a 15,000 psi subsea well control system and upgraded system handling, and living quarters for up to 200 personnel.
The expected construction cost of the rig, including commissioning and system integrated-testing and project management, is approximately $600m. The company expects to fund the construction of the unit with available cash, cash flow from operations and, if required, borrowings under its available credit facility. Payment terms negotiated with the shipyard are attractive, with a high percentage of the rig's cost due upon delivery. In addition, the agreement with SHI includes an option for a second unit at similar terms and conditions, which could be exercised during the first quarter of 2011.