Rowan Orders New Drillship from HHI (South Korea)

Rowan Companies plc announced today that it has exercised its option to build a fourth GustoMSC P10,000 design ultra-deepwater drillship with Hyundai Heavy Industries Co., Ltd. with delivery scheduled in March 2015.

The cost for this rig, including commissioning, project management and spares, but excluding capitalized interest, is estimated to be approximately $620 million. This cost compares to peer companies’ previously announced 12,000 foot capable rigs equipped with 10,000 feet of riser. Rowan plans to equip its drillships with 2,000 feet of additional riser to enable operations in water depths up to 12,000 feet upon delivery. Each drillship will also be equipped with a second BOP for minimizing non-productive time. The Company will also incur operational training and personnel ramp-up costs in readying the drillships to commence well operations. Expected costs for the additional riser, BOP and training and ramp-up costs will be approximately $75 million. Total cost for the Company’s fourth drillship will be approximately six percent higher than the Company’s first three drillships primarily due to equipment price increases and projected labor cost increases. The agreement with HHI also includes an option for a similar fifth drillship exercisable in the fourth quarter of 2012, for delivery in the third quarter of 2015.

Matt Ralls, President and Chief Executive Officer, commented, “We are very pleased to add a fourth ultra-deepwater drillship to our fleet. The recent three-year contract obtained for our first drillship, the Rowan Renaissance, and strong customer enthusiasm for Rowan’s history of operational excellence, high-specification drillship design and experienced deepwater team, reaffirms our confidence in our expansion into the ultra-deepwater market.”

The Rowan Renaissance struck steel in July 2012 and is expected to be delivered in late 2013. The second and third drillships are expected to be delivered in the second and fourth quarters of 2014, respectively.

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Source: Rowan, September 10, 2012