Diamond Offshore has received notifications of award for three term drilling contracts from Petrobras in Brazil. The commitments for the three floating drilling rigs would generate combined maximum total revenue of approximately $1.4 billion, excluding potential performance bonus payments and any potential contract extensions, and represent at least 11 years of contract drilling backlog.

New Contracts The dynamically positioned, ultra-deepwater semisubmersible Ocean Valor received a three-year commitment that would earn maximum total revenue of approximately $493 million. Preparations are under way to mobilize the rig from Singapore to Brazil, with work expected to commence at mid-year 2010. Petrobras has the right to convert the contract to five years anytime during the first year of operation, with a slight reduction in dayrate.

The deepwater semisubmersible Ocean Baroness received a three-year commitment that would earn maximum total revenue of approximately $307 million, plus a potential 5% performance bonus. Preparations are under way to mobilize the rig from the Gulf of Mexico to Brazil, with work expected to commence in the third quarter of 2010. Petrobras has the right to convert the contract to five years anytime during the first year of operation, with a slight reduction in dayrate.

The dynamically positioned deepwater drillship Ocean Clipper received a five-year commitment under which the unit would earn maximum total revenue of approximately $557 million, plus a potential 5% performance bonus. The rig is currently working for Petrobras under a contract that extends until mid-December 2010.

Relocation Additionally, we have been advised by Petrobras that they will initially employ the Ocean Courage in Brazil commencing late in the second quarter of 2010, rather than the Gulf of Mexico as previously anticipated, and preparations are under way to mobilize the unit. The rig is currently under a previously announced five-year contract to Petrobras extending until mid-February 2015.

The rigs Valor and Courage are ultra-deep water semi-submersibles purchased out of bankruptcy by subsidiaries of Diamond Offshore in late 2009. Upon delivery by the shipyard, the Company completed initial commissioning procedures for both rigs.

Tags: Diamond Offshore Drilling