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Songa Wins $2.66 Billion Offshore Drilling Contract with Statoil

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February 25, 2012

OSLO -(Dow Jones)- Norwegian offshore drilling operator Songa Offshore SE (SONG.OS) Friday said it has been awarded a rig contract from Statoil ASA (STO) worth $2.66 billion for two newbuild cat D semi-submersible rigs, a type of rig which is specially designed to get more out of mature fields.

The contract follows a similar deal signed last July with Statoil that is also for the provision of two newbuild cat D rigs.

The rigs will be built by Daewoo Shipbuilding & Marine Engineering Co. (042660.SE) in South Korea at a fixed price of $570 million per unit, with the first rig due for delivery in February 2014 and the last unit to be delivered in May 2015.

The contract period is for eight years, with an option to extend for 12 years per rig.

With the delivery of four new cat D rigs in 2014-2015, Songa Offshore “will take a lead role in the region” with a total of seven rigs carrying out exploration and production drilling for Statoil and its partners, Songa Offshore Chief Executive Asbjoern Vavik said in a statement.

Songa Offshore said that Statoil has granted bridge financing for the 20% down payment to Daewoo, while further construction costs will be financed by ongoing cash flows and bank loans.

Songa will also operate three semi-submersible rigs for Statoil from the second half of 2012.

Shares closed Thursday at NOK20.70, valuing the company at NOK3.47 billion.

-By Kjetil Malkenes Hovland, Dow Jones Newswires

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