HOUSTON, Feb. 27, 2008 (PRIME NEWSWIRE) -- Pride International, Inc. (NYSE:PDE) today announced that it has been awarded contract extensions from Petroleo Brasileiro S.A. (Petrobras) for the deepwater, dynamically positioned semisubmersible rigs Pride Rio de Janeiro and Pride Portland.
The contract extensions, representing six years per rig, are expected to commence during late 2010 to early 2011, in direct continuation of each rig's current contract commitment and a scheduled shipyard program to complete a regulatory survey. Estimated contract revenues which could be generated from each six-year contract extension are approximately $768 million, inclusive of a performance bonus opportunity for each rig of up to 15 percent, or approximately $1.5 billion in total revenues. The contract extensions also provide for a cost escalation provision from the signing date through the six-year term.
Louis A. Raspino, President and Chief Executive Officer of Pride International Inc., commented, "The extensions of these two dynamically positioned, deepwater semisubmersibles through 2016 are further evidence of the continuing need by clients for deepwater rigs and reflect the long-term nature of the present deepwater drilling cycle. With these extensions, Pride will remain one of the largest contractors of floating rigs to Petrobras in support of their exploration and development drilling needs. Accordingly, our company is in an advantageous position to potentially benefit from additional deepwater rig requirements for Petrobras in Brazil, as well as in their international deepwater operations."
As previously disclosed, consideration received under the contract extensions will be subject to an earn-out provision with the company's previous joint venture partner. The company expects payments, if any, under the earn-out provision to be less then $10,000 per day, per rig over the term of the contract extensions, which would be capitalized as additional purchase price.
The Pride Rio de Janeiro and Pride Portland are two of eight deepwater rigs currently in the Pride International fleet, six of which are dynamically positioned deepwater rigs. The two semisubmersibles have operated offshore Brazil for Petrobras since entering service in 2004. Both units are expected to continue operations offshore Brazil throughout the extension period.
Pride International, Inc., headquartered in Houston, Texas, is one of the world's largest offshore drilling contractors, operating a fleet of 64 rigs, including two deepwater drillships, 12 semisubmersible rigs, 28 jackups, 10 platform rigs, five managed deepwater rigs and seven Eastern Hemisphere-based land rigs. The company also has three ultra-deepwater drillships under construction with expected deliveries in 2010 and 2011.
Statements regarding expected total revenues, contract commencement dates, duration of the deepwater drilling cycle, the expected amount of earn-out payments, as well as any other statements that are not historical facts, are forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements are subject to certain risks, uncertainties and assumptions identified above or as disclosed from time to time in the company's filings with the Securities and Exchange Commission. As a result of these factors, actual results may differ materially from those indicated or implied by such forward-looking statements.
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