HOUSTON, Oct. 15 /PRNewswire/ -- R&B Falcon Corporation (NYSE: FLC) and
Vastar Resources, Inc. (NYSE: VRI) announced today that R&B Falcon Drilling
Co. and Vastar have executed a letter of intent with respect to a three-year
drilling contract for the provision of a new-generation ultra-deepwater
dynamically positioned semisubmersible drilling rig, the "RBS8-D". The
transaction is subject to later agreement on a definitive drilling contract.
The design of the proposed "RBS8-D" is similar to the previously announced
moored semisubmersible now under construction for use by Shell Deepwater
Development Inc. The new semisubmersible announced today would have a
variable drilling load of 8,000 metric tons and could operate in a dynamically
positioned configuration in up to 10,000 feet water depth. The rig would be
initially outfitted to work in up to 8,000 feet of water in the U.S. Gulf of
Mexico, with its design being suitable for worldwide service, including in the
harsh environments of the North Sea and west of Shetland areas.
Once the drilling contract is executed, the transaction is expected to
generate revenues for R&B Falcon of approximately $220 million over a three-
year term. Vastar may elect to expand the primary contract term to five years
firm, in which case the contract would generate revenues of approximately
$345 million. Additionally Vastar may extend the contract through five
one-year options. R&B Falcon expects the construction cost to be
approximately $270 million, exclusive of capitalized interest and other non-
hardware costs. Shipyard delivery would be scheduled for the fourth quarter,
2000. Because of favorable interim financing arrangements with vendors, this
project is not expected to add materially to R&B Falcon's peak borrowing
requirements.
Steven A. Webster, R&B Falcon's President and Chief Executive Officer,
said, "We are very pleased to have been selected through Vastar's extensive
technical review to begin negotiations on providing the new drilling rig. R&B
Falcon believes that this unit, together with the first semisubmersible of
similar design already under construction, will be among the most
technologically advanced semisubmersibles in the world. The signing of this
letter of intent comes in rapid succession with the christening on
September 29 of R&B Falcon's first newly constructed drillship, the Deepwater
Pathfinder. R&B Falcon expects to have similar success in delivering on time
and on budget this proposed second newbuild semisubmersible."
"This new drilling rig will significantly enhance Vastar's ability to
efficiently test and develop fields in the deep and ultra-deep waters of the
Gulf of Mexico," said Charles D. Davidson, Vastar's President and Chief
Executive Officer. "This decision to enter negotiations reflects Vastar's
growing confidence in the quality of its deepwater prospect inventory."
R&B Falcon Corporation operates the world's largest fleet of 118 marine-
based drilling rigs for the international oil and gas industry consisting of
twelve drillships (including seven under construction), twelve semisubmersible
rigs (including three under construction), 26 jackups, three submersible rigs,
two tender rigs, 62 barge drilling and workover rigs and a floating production
vessel. R&B Falcon actively markets 101 of these units in the offshore and
inland waters worldwide. R&B Falcon also operates a leading offshore and
inland marine towing and service business. On August 21, 1998, the Company
announced execution of a definitive merger agreement with Cliffs Drilling
Company which will result in addition of sixteen jackups, three self-contained
platform rigs, eleven land rigs and four mobile offshore production units
(MOPU's) to R&B Falcon's fleet.
Vastar Resources, Inc., headquartered in Houston, finds, develops and
produces natural gas and liquid hydrocarbons. Vastar is currently active in
more than 80 producing fields, with production in the Gulf of Mexico shelf,
Gulf Coast, Rockies/Hugoton and Oklahoma/Arklatex areas, and a growing
exploratory presence in the Gulf of Mexico deepwater trend.
Except for the historical information contained herein, the matters
discussed in this press release are forward-looking statements that involve
certain assumptions, risks and uncertainties. Actual results could differ
materially based upon numerous factors detailed from time to time in R&B
Falcon Corporation, or Vastar Resources, Inc. reports filed with the
Securities and Exchange Commission.
SOURCE R&B Falcon Corporation
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Related links:
http://www.rbfalcon.com
Company News On-Call:
http://www.prnewswire.com/comp/118988.html or fax,
800-758-5804, ext. 118988
CONTACT:
Charles R. Ofner of R&B Falcon Corporation,
281-496-5000; or Media: James Bartlett, 281-584-3448, or
Financial: Ellen DeSanctis, 281-584-3477 both of Vastar Resources
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