PPL Shipyard to build US$364mln 2 jack-up rigs

Deal with options another 3 jack-up rigs from Atwood Oceanics reaffirms confidence in market.

Sembcorp Marine's subsidiary PPL Shipyard has secured two turnkey contracts with a combined value up to US$364 million to build two jack-up rigs with options for another three jack-up rigs from Atwood Oceanics Pacific Limited ("AOPL"), a wholly-owned subsidiary of Atwood Oceanics Inc.

Scheduled for delivery in September 30 and December 31 of 2012, the jack-up rigs will be built based on PPL Shipyard's latest proprietary design, the Pacific Class 400. These new rigs will be capable of operating in deeper waters of 400 feet and equipped with offline handling features. They will have accommodation for 150 men as compared with 120 men in the Pacific Class 375 jack-up rigs, according to a Sembcorp Marine report.

With the contract value of each of the first two jack-up rigs ranging up to US$182 million and up to approximately US$200 million for each of the three options, the total estimated value of the five jack-up rigs, including options for three units, will be slightly below US$1 billion.

Dr Benety Chang, Deputy Chairman of PPL Shipyard said "We are pleased that Atwood Oceanics has chosen PPL's Pacific Class 400 design to be part of their fleet expansion programme. The confidence in this rig design and its capabilities could lead to more of such orders for our proprietary design.”

Rob Saltiel, President and CEO of Atwood Oceanics, Inc., commented “We look forward to expanding our high-specification jack-up fleet with these Pacific Class 400 drilling rigs. This jack-up design combines excellent capability, efficiency and flexibility that will allow Atwood to better serve our clients. PPL Shipyard has an excellent reputation for quality and responsiveness, and we expect they will be a great partner for Atwood in this strategic endeavor."

This contract by Atwood Oceanics is potentially the largest order of rigs since the credit crunch of 2008. This reaffirms confidence in the jack-up rig market and in particular the high specification rigs.