The contract for the Safe Caledonia has a fixed duration of 12 months, with start up in the first half of June 2004. The client has in addition further 4 x 1 month options. The options must be declared three months in advance. Prosafe's direct mobilisation costs in connection with the move of the Safe Caledonia to Nigeria will also be covered by the client.
Total contract value for the period from 19 April 2004 until the end of the contract in June 2005 is about USD 37 million, inclusive a USD 5.8 mill contribution related to the transit from East Timor to Nigeria and demobilisation, but exclusive of options.
This contract confirms Prosafe's belief in a stronger market for service and accommodation rigs in the coming years, based on an increase in both geographical opportunities and demand drivers.
Prosafe concluded in 2003 the upgrades and modifications of its rig fleet in connection with the five-year contracts in Mexico and subsea well intervention. This contact will give the company the opportunity to also upgrade the Safe Caledonia from DP1 to DP2. This will give the rig a greater flexibility, which is important because the demand for DP-operations is expected to increase in the future, e.g. in connection with support to FPSOs, which by their own constitute a market with long-term growth opportunities. In total, this will further increase the fleet's quality and competitive edge. The upgrade to DP2 will be performed while the rig is being moved from East Timor to Nigeria, and will cost about USD 9 mill.
With this contract, Prosafe's rig fleet is secured a total fleet utilisation of about 89% in 2004. Thereafter, the fleet is secured an utilisation of about 69% for 2005, 62.5% for 2006 and 2007, and about 30% for 2008.
Prosafe is the world's leading owner and operator of semi-submersible service rigs, the largest platform drilling contractor in Norway and a major owner and operator of floating production and storage vessels outside the North Sea. Operating revenues reached NOK 2.9 billion in 2003. The company employs approx. 2,000 people. Prosafe operates in the North Sea, South-East Asia, India, Egypt, West Africa and the Gulf of Mexico. The company is headquartered in Stavanger, Norway. Prosafe is listed on the Oslo Stock Exchange with ticker code PRS. For more information, please refer to www.prosafe.com.
Tananger, 5 April 2004