Newbuilds are slated to cost US$230 million
Seadrill has entered into an agreement for the construction of two high specification jack-up drilling rigs with Dalian Shipbuilding Industry Offshore Inc. (DSIC Offshore) in China. The new units are scheduled for delivery during the first and second quarter 2015, and the estimated total project price is approximately US$230 million (including project management, capitalized interest, drilling and handling tools, spares and operation preparations) per rig, with tail-heavy payment terms.
The two new units will be based on the F&G JU2000E design, with water depth capacity of 400ft and drilling depth of 30,000ft. Seadrill has in addition received fixed price option agreements to construct an additional two units at Dalian, with delivery in the third and fourth quarter 2015. The new jack-ups are of the same design as the four jack-ups currently under construction by Seadrill at Dalian and Jurong, Singapore.
John Fredriksen, Chairman and President of Seadrill Limited, says in a comment, "These newbuilds position us for additional growth in a strengthening jack-up market, providing further earnings upside for Seadrill. The premium jack-up market continues to demonstrate strength as evidenced by increasing dayrates and utilizations. Customers continue show preference for newer units from drilling contractors with proven track records of safe and efficient operations. Currently 312 jack-ups or 65% of the total fleet of 483 jack-ups are older than 25 years. These two new firm orders increases our fleet of modern jack-ups to 25 rigs with an average age of 3 years, and further strengthens our position as the leading operator of premium modern, high-quality drilling units.