Pride bags five-year contract for $876 million

Pride International, Inc. will expand its deepwater drilling operations and its geographic reach in deepwater drilling basins to the strategically important U.S. Gulf of Mexico following the award of a five-year contract from a subsidiary of BP.

The contract award is for Pride’s advanced capability, ultra-deepwater drillship that is scheduled for delivery during the first quarter of 2010 and is currently in the early stages of construction at the Samsung Heavy Industries Co. Ltd. (SHI) shipyard in Geoje, South Korea. The drillship is scheduled to be the first of three ultra-deepwater units to be added to the Pride International fleet beginning in 2010 and constructed at the SHI shipyard. Following the rig’s arrival, the company will have a presence in the world’s three established deepwater drilling regions — Brazil, West Africa (Angola) and the U.S. Gulf of Mexico.

The five-year contract is expected to commence during the third quarter of 2010, following the completion of shipyard construction, mobilization of the rig to the U.S. Gulf of Mexico and customer acceptance testing. Revenues that could be generated over the five-year contract term, excluding revenues for the reimbursement of costs associated with the mobilization of the rig, are approximately $876 million. The contract also provides for a cost escalation provision from the signing date of the contract through the five-year term.

The rig will be one of the most advanced ultra-deepwater drilling and completions units in the offshore industry, capable of drilling in water depths of up to 12,000 feet (equipped for 10,000 feet) and drilling to a total vertical depth of up to 40,000 feet, while offering a variable deck load of 20,000 metric tons, dynamic positioning in compliance with DPS-3 certification, expanded drilling fluids capacity, a 1,000 ton capacity top drive and living quarters for up to 200 personnel.