Dragon Oil has awarded a contract, subject to the signing of a formal contract within the next 60 days, to Yantai Raffles Offshore Ltd. for lease and management of a new build Super M2 jack-up rig (the 'M2 jack-up rig') in the Cheleken Contract Area.

The M2 jack-up rig will be constructed as a self-elevating drilling unit in accordance with international marine construction standards. The M2 jack-up rig is expected to be constructed and mobilized to the Cheleken Contract Area in Q4 2011. Upon delivery, the lease and management contract is expected to commence for an initial duration of five years, with an option to extend it for a further period of up to two years.

Yantai Raffles Offshore Ltd. is a subsidiary of Yantai Raffles Shipyard Limited, an offshore and marine fabrication specialist, headquartered in Singapore. The company specializes in marine and offshore projects that include construction of jack-up drilling rigs and semi-submersible drilling rigs.

Dr Abdul Jaleel Al Khalifa, Chief Executive Officer, commented, "I am pleased to announce that Dragon Oil has awarded a contract for lease and management of a new build Super M2 jack-up rig commencing in Q4 2011. This contract gives us an excellent opportunity to secure the rig we want and for a longer period than would otherwise be possible in the open market. In 2009, we achieved significant progress with securing rigs for the development of the Cheleken Contract Area and today's announcement underscores our commitment to work in the same direction."

Tags: Dragon Oil Plc