HOUSTON, Nov. 22 /PRNewswire-FirstCall/ -- TODCO (the "Company")
(NYSE: THE) today announced the reactivation of three cold-stacked drilling
rigs against term contracts from three independent oil and gas companies.
Rig 1, a 2000-hp conventional inland barge, will be reactivated for an
estimated cost of $5.7 million against a one-year term contract with contract
revenues of approximately $10.5 million. Approximately $2.3 million of the
cost to reactivate the unit will be capitalized with the remainder being
expensed over the 90 day reactivation period.
The offshore submersible drilling rig, THE 77, which has been cold stacked
since 1999, will be reactivated and upgraded against a nine-month term
contract with contract revenues of approximately $23 million. It is estimated
that the unit will take 150 days to reactivate at a cost of approximately
$16.8 million and approximately 70% of the reactivation cost will be expensed
over the reactivation period.
Finally, the offshore submersible drilling rig, THE 78, will be
reactivated and upgraded at a cost of approximately $11.4 million. The
company received a six-month term contract with estimated contract revenues of
$13 million to support the reactivation cost. Over the 120-day reactivation
period, approximately $6.8 million of the cost to reactivate the unit will be
expensed.
Jan Rask, President and Chief Executive Officer of TODCO, said, "We are
pleased to announce the signing of these term contracts to facilitate the
reactivation of three cold stacked drilling rigs. We look forward to
satisfying our customers' needs for deep gas drilling units with our upgraded
submersible rigs, THE 77 and THE 78. With 16 remaining cold stacked rigs in
the U.S., we will continue to adhere to our strategy of only reactivating rigs
with customer support."
Statements regarding the reactivation of our Rig 1, THE 77 and THE 78 as
well as any other statements that are not historical facts in this release are
forward-looking statements within the meaning of U.S. securities laws and
involve certain risks, uncertainties and assumptions. These include, but are
not limited to, general market conditions, estimated contract revenues,
estimated reactivation costs, estimated reactivation times, contract
performance and other factors detailed in TODCO's filings with the Securities
and Exchange Commission. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those indicated.
TODCO is a leading provider of contract oil and gas drilling services with
the largest rig fleet in the shallow water of the U.S. Gulf of Mexico and
along the U.S. Gulf Coast. TODCO's common stock is traded on the New York
Stock Exchange under the symbol "THE". For more information about TODCO
please visit our website at http://www.theoffshoredrillingcompany.com .
SOURCE TODCO
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Related links:
http://www.theoffshoredrillingcompany.com
CONTACT:
T. Scott O'Keefe, Sr. Vice President & CFO of
TODCO, +1-713-278-6010
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