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Saturday, 30 August, 2008, 11:40 GMT | more prices >>

Ensco finalises first-ever drilling contract



By Upstream staff 

US independent Cobalt International Energy has obtained its first-ever drilling contract for a newbuild deep-water semisub to conduct an exploration programme in the US Gulf.

The Cobalt deal is for use of the Ensco International newbuild Ensco 8503, which the contractor said it had a letter of intent for back in March.

The rig is under construction at Keppel Fels shipyard in Singapore.

Cobalt has been very active in US Gulf lease sales over the past few years, but has yet to operate a well in the region.

Led by former Unocal president Joe Bryant, Cobalt was ranked fourth in number of high bids place in March’s Central Gulf Lease Sale 206.

The upstart placed apparent high bids on 36 deep-water tracts totaling $389 million.

In Sale 205 held last October, Cobalt placed high bids totaling $211 million on 53 blocks.

The rig contract is for a two-year primary term that can be extended to a three or four year term by Cobalt.

The aggregate day rate revenue for the base two-year contract term is expected to be about $372 million.

The base operating rate is $510,000 per day, and is subject to adjustment for variances in operating costs from January 2008 levels.

Ensco will be reimbursed for rig mobilization to the Gulf of Mexico and any special equipment upgrades requested by Cobalt.

Delivery of the Ensco 8503 to Cobalt is currently anticipated in late 2010 or early 2011.

Just last month, Ensco green lit for construction of its fifth 8500 Class semisub at Keppel Fels.

The Ensco 8504 is being built on speculation. Ensco said at that time the unit would cost around $515 million.


Monday, 05 May, 2008, 20:11 GMT  | last updated: Monday, 05 May, 2008, 20:23 GMT

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