Seadrill Acquires High-end Jack-up Rig 'Prospector 3'

Seadrill Limited has entered into an agreement to acquire the company that owns the yard construction contract of the newbuild high specification jack-up rig 'Prospector 3' from Prospector Offshore for a total purchase price of US$235 million.

In addition, Seadrill will provide drilling and handling tools, spares and operations preparations resulting in a total cost for this rig, ready to drill, of approximately US$250 million.

The Prospector 3 is scheduled to be delivered from Dalian Shipbuilding Industry Offshore Co., Ltd. (DSIC Offshore) in China during the first quarter of 2014.  The new unit is based on the F&G JU2000E design, with water depth capacity of 400ft and drilling depth of 35,000ft.

The lack of premium jack-up newbuild activity over the last decade is beginning to be felt and demand is currently exceeding available supply.  The tightness in the market is leading many customers to contract these units for significantly longer terms than previously experienced for this asset class.  The Board of Seadrill continues to be of opinion that the premium jack-up market provides a compelling investment opportunity.

The agreement with Prospector is subject to approval by DSIC Offshore.