New Drillship Order Further Strengthens Ensco Ultra-Deepwater Fleet

Given rising customer demand, Ensco plc (NYSE: ESV) has exercised one of two options for an additional advanced-capability DP3 ultra-deepwater drillship based on the Samsung GF12000 hull design. The vessel, ENSCO DS-9, will be the seventh Samsung DP3 drillship in the Ensco fleet, extending the benefits of Ensco’s fleet standardization strategy. It will be built at the Samsung Heavy Industries, Co. Ltd. (SHI) Shipyard in South Korea, with delivery scheduled for the fourth quarter of 2014.

On 5 April, Ensco announced its order for ENSCO DS-8, the first drillship based on the GF12000 hull design. This fleet expansion will extend Ensco’s advantage of operating the newest ultra-deepwater fleet among global drilling contractors. The latest independent customer satisfaction survey conducted by EnergyPoint ranks Ensco #1 in Deepwater Drilling.

Chairman, President and CEO Dan Rabun said, “Our decision to order two ultra-deepwater drillships over the past three months is predicated on detailed analysis of several important factors. Customer demand has continued to rise and has become even more broad-based due to new discoveries in emerging basins. The near-term supply of deepwater rigs is limited and we believe supply-demand dynamics will continue to support favorable day rates, which have risen sharply over the past year. Significant interest in our latest-design drillships gives us confidence that customers recognize the technological advantages of our drillships relative to competitors and the benefits we provide from rig standardization. Finally, the delivery schedule and financing terms support favorable returns for these incremental investments in our fleet.”

Including commissioning, systems integration testing, project management and spares, the construction cost is expected to be comparable to the amount recently announced for ENSCO DS-8 of approximately $645 million. Like ENSCO DS-8, the new unit will have advanced capabilities to meet the demands of ultra-deepwater drilling in water depths of up to 12,000 feet and a total vertical drilling depth of 40,000 feet, plus retractable thrusters; enhanced safety and environmental features; improved dynamic positioning capabilities; and advanced drilling and completion functionality, including below-main-deck riser storage, triple fluid systems, offline conditioning capability and enhanced client and third-party facilities.

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