BRAZIL: Pride International Inc. was awarded contract extensions from Petrobras for deepwater, dynamically positioned semisubmersibles 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.
The estimated contract revenues that could be generated from each six-year contract extension are approximately US$768 million, inclusive of a performance bonus opportunity for each rig of up to 15 percent, for approximately US$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.
Consideration received under the contract extensions will be subject to an earn-out provision with the Pride's previous joint venture partner. The company expects payments, if any, under the earn-out provision to be less then US$10,000 per day, per rig over the term of the contract extensions, which would be capitalized as additional purchase price.
Pride Rio de Janeiro and Pride Portland have operated offshore Brazil for Petrobras since entering service in 2004. The rigs are expected to continue to operate offshore Brazil throughout the extension period. Both semis are capable of drilling to a total depth of 20,000 feet (6,096 m) while operating in up to 5,600 feet (1,707 m) of water.
http://www.energycurrent.com/index.php?id=2&storyid=9121
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