Drilling contractor Pacific Drilling (NYSE: PACD) is kicking off 2013 by continuing on an aggressive ultra-deepwater drillship expansion program, announcing Tuesday that it has exercised an option to construct its eighth such ship with Samsung Heavy Industries.
Similar to Pacific Drilling’s previous newbuilds, the drillship will have a rated water depth of 12,000 feet, be equipped for 40,000 feet drilling depth, have accommodation for 200 personnel, and be equipped to support dual gradient drilling. The total cost of the ship, excluding capitalized interest, is approximately $620 million and delivery is scheduled for March 16, 2015.
The company currently operates four drillships under customer contract, and has one drillship on order (delivery 2014) and two others (delivery 2013) under construction at Samsung, both of which are already under customer contract.
“We are extremely pleased to announce the order of our eighth ultra-deepwater drillship,” said Pacific Drilling CEO Chris Beckett. “The strong market for deepwater drilling, attractive construction cost, strength of relationships with our preferred vendors, and robust operating performance of our in-service rigs support the decision to invest in the further expansion of our fleet.”
Pacific Drilling says that financing is expected to be provided by a combination of cash flows from ongoing operations and long-term debt.