GLOBAL MARINE AWARDED ULTRA-DEEP-WATER DRILLING COMMITMENT
Company to Build Second New Drillship,
Bringing Deep-Water Fleet to Ten Rigs
HOUSTON, March 16, 1998 -- Global Marine Inc. (NYSE-GLM) announced today that it has received its second deep-water drilling commitment in less than a month, this time from Exxon Exploration Company. The letter of intent with Exxon will result in construction of Global Marine's second Glomar 456 Class dynamically-positioned drillship, which is expected to generate revenues of approximately $208 million over a three-year term. Until the end of June 1998, Exxon could elect to reduce the contract term to two years, in which case Global Marine would have the right to market the new drillship for a total of one year during the three-year term.
C. Russell Luigs, Global Marine chairman and chief executive officer, commented, "This new state-of-the-art drillship will bring Global Marine's deep-water fleet to ten rigs with a contract backlog of over $1.2 billion. It is the third addition to our deep-water fleet approved so far in 1998 and further confirms our commitment to the deep-water market. Since January 1, 1998, we have approved over $800 million to expand the fleet, reflecting our confidence in the fundamental strength of the offshore drilling business. This confidence is supported by the 17 new contract commitments we have received so far in 1998, including the commitments for our two new drillships. In total, these commitments are for 15 rig years and are expected to generate revenues of $750 million. For those rigs already in our fleet, the new commitments reflect an average 28 percent increase over the current dayrates for the same rigs, generating an incremental $330,000 per day. Two of these rigs are being moved from U.S. waters to new contracts in the North Sea."
The new ultra-deep-water rig is scheduled to be delivered in the first quarter of 2000 and will initially be outfitted to work in water depths to 8,000 feet. It will be the company's second Glomar 456 Class drillship, and, as previously announced, the company has an option to build it at the Harland & Wolff Shipyard in Belfast, Northern Ireland, where the company's first Glomar 456 Class drillship is under construction. Global Marine's investment in this second new drillship is expected to exceed $300 million including all equipment, financing, engineering, and other associated costs. Global Marine intends to finance the rig's construction with internally generated funds plus funds available under existing bank credit facilities.
The proprietary Glomar 456 Class dynamically-positioned drillship can be equipped to operate in 12,000 feet of water. Incorporating a unique horizontal/vertical pipe-handling system, the ship is capable of drilling while simultaneously making up casing strings or bottom-hole assemblies. With crude oil storage capacity of 130,000 barrels, dual subsea-tree handling capability, independent mud and brine systems, and ample space to install well-testing equipment, the Glomar 456 design is ideally suited for ultra-deep-water development drilling and extended well-testing.
Houston-based Global Marine is one of the largest offshore drilling contractors with an active fleet of 31 mobile rigs worldwide plus the two new drillships. In addition, the company is the world's largest provider of offshore turnkey drilling services, employing approximately 16 additional rigs.
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The foregoing information includes forward-looking statements regarding future performance or results, the estimated cost of and delivery date for the new drillship, estimated revenues, and other statements that are not historical facts. Such statements involve risks and uncertainties including, but not limited to, changes in markets for oil and gas and for offshore drilling rigs and the risks of doing business in changing markets, engineering and construction delays and the risk that such delays could change the rig's delivery date, the risks involved in dealing with other parties, and other factors discussed above and in the Company's Securities and Exchange Commission filings. Should one or more risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. |
