Songa Mercur Rig Off-hire in China Due to Equipment Failure

The Songa Mercur is currently off-hire in China resulting from structural failure of the telescopic joint, causing an uncontrolled descent of the BOP and Marine riser a short distance to sea bed on 16 January 2011. The rig was not drilling at the time of the incident and the BOP is in safe distance from the well which had already been plugged and secured.

The Company foresee that all required resources are readily available in area for a safe and effective recovery. The incident is currently under investigation and further updates to the recovery process will be issued when details and facts are available.

The on-going well was near its final stages at time of incident and rig had been planned to be towed to Singapore area after well completion in preparation for upcoming and future contracts. Henceforth, the Company does not foresee any significant cost impact to budgets and/or projections resulting from the incident.

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Source: Songa Offshore, January  20, 2011;

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