LONDON--(BUSINESS WIRE)--Ensco plc (NYSE: ESV) announced today that a subsidiary of the Company has entered into a 950-day drilling contract with Petroleo Brasileiro S.A. - Petrobras (NYSE: PBR) for ENSCO 7500, a 5th generation ultra-deepwater semisubmersible drilling rig that has operated for more than 10 years in the major offshore markets of Australia and the U.S. Gulf of Mexico. Following upgrades to the rig at a shipyard in Singapore, ENSCO 7500 is scheduled to commence operations in third quarter 2011. Petrobras may extend the term for up to 950 additional days at mutually agreed rates.
Chairman, President and Chief Executive Officer Dan Rabun commented, "We are very pleased that Petrobras – a leading operator in the deepwater market – has selected ENSCO 7500 for its latest drilling program. Brazil’s deepwater reserves are among the largest in the world and we seek to expand our presence in this growing market.”
The day rate is $320,000 under the new contract, subject to adjustments based on variances in operating costs. In addition, should the rig operate in water depths greater than 1,500 meters, the day rate increases by an additional $200 per meter/per day. Ensco is eligible to receive up to a 5% performance bonus on the day rate and will receive a $19 million fee for mobilization and equipment upgrades.
As previously reported, under the prior ENSCO 7500 contract with Chevron in Australia, a demobilization fee of approximately $26 million was payable to Ensco, subject to adjustment based on the terms of the subsequent contract. The $26 million fee has already been received by Ensco and, in light of the new contract for ENSCO 7500 with Petrobras, Ensco will recognize the $26 million fee in fourth quarter 2010 revenues rather than first quarter 2011. As a result, total revenues for fourth quarter 2010 are anticipated to be approximately $400 million, compared to the most recent revenue outlook of $375 - $400 million provided in the Company’s 29 October 2010 press release.
Ensco plc (NYSE: ESV) brings energy to the world as a global provider of offshore drilling services to the petroleum industry. With a fleet of ultra-deepwater semisubmersible and premium jackup drilling rigs, Ensco serves customers with high-quality equipment, a well-trained workforce and a strong record of safety and reliability. To learn more about Ensco, please visit our website at www.enscoplc.com. Ensco plc is an English limited company (England No. 7023598) with its registered office and global headquarters located at 6 Chesterfield Gardens, London, W1J 5BQ.
Statements contained in this news release that state Company or management intentions, hopes, beliefs, anticipations, expectations or predictions of future events are forward-looking statements. Such forward-looking statements include references to the expected mobilization, revenue, commencement and term for the new ENSCO 7500 contract, revenue recognition for the demobilization fee under the prior ENSCO 7500 contract, the revised fourth quarter 2010 revenue outlook, and intended expansion into the Brazil offshore market.
It is important to note that the Company's actual results could differ materially from those projected in such forward-looking statements. The factors that could cause actual results to differ materially from those in the forward-looking statements include the following: (i) changes or delays in the anticipated rig upgrades and mobilization, (ii) changes in the actual drilling contract revenues or term, (iii) renegotiation, cancellation, or breach of contracts, (iv) shipyard risks, (v) force majeure events, and (vi) the operational and other risks described from time to time in the Company's SEC filings. Copies of such SEC filings may be obtained at no charge by contacting our Investor Relations Department at 214-397-3045 or by referring to the Investor Relations section of our website at www.enscoplc.com.
The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements to reflect any change in Company or management expectations or any change in events, conditions or circumstances on which any such statements are based.