Transocean Awarded Drillship Contract

Chevron Corporation awarded Transocean Inc. a drilling contract for the construction of an enhanced Enterprise-class drillship, the third such contract award for Transocean in 2006 and the second contract award from Chevron, following a five-year contract for the construction of the Discoverer Clear Leader announced in March 2006. Chevron awarded Transocean a five-year contract, but has the right to convert the contract to a duration of three years if declared by September 2007. The contract is expected to commence during the first quarter of 2010, following shipyard construction, sea trials, mobilization to the U.S. Gulf of Mexico and customer acceptance. The contract commencement date is contingent on vendor performance and other factors. Revenues which could be generated over a five-year contract period are approximately $862m, or approximately $609m should the contract be converted to a duration of three years. Estimated contract revenues exclude revenues for mobilization, demobilization, customer reimbursables and adjustments for the escalation of operating costs at contract commencement and semi-annually thereafter. Construction of the dynamically positioned, double-hull drillship is scheduled to take place at the Daewoo Shipbuilding and Marine Engineering Co., Ltd. yard in Okpo, South Korea. The estimated total capital expenditure for the unit is approximately $670m, excluding capitalized interest.