Scorpion Offshore Receives LOA for the Use of Jackup Offshore Venezuela

Scorpion Offshore received a letter of agreement (LOA) from two European majors for the use of the Offshore Vigilant jackup in a drilling program offshore Venezuela.

The drilling program includes two firm wells, plus two optional wells, with an estimated duration between 240 and 480 days, depending on option declarations. The contract is expected to begin in early June 2010 and has an initial estimated value of approximately $38.0 million not counting the options. The commitment made by the operator within the LOA remains subject to partner and government approval until May 31, 2010.

In early October 2009, the Offshore Vigilant completed the first of two wells for Gazprom. Gazprom was not in a position to commence operations on the second well and is currently in discussions with the Company regarding the timing of operations on the second well, which is estimated to be at least 5.5 months commencing in continuation of the work described above. Including this LOA, our backlog as of May 1, 2010 is $677.1 million. This backlog equates to an average contract duration of approximately 1.6 years and an average dayrate of $167,000 for each of the Scorpion’s seven units.

Scorpion Offshore Ltd is a Bermuda based corporation founded in 2005, which owns seven state-of-the-art offshore jackup rigs built between 2007 and 2010.

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Source: Scorpionoffshore, May 26, 2010;