Diamond Offshore Places $300 Million Order For Semisubmersible Rig

Date : 01/09/2012 @ 8:12AM
Source : Dow Jones News
Stock : Diamond Offshore Drilling, Inc. (DO)
Quote : 11.55  -0.29 (-2.45%) @ 4:00PM

Diamond Offshore Places $300 Million Order For Semisubmersible Rig

Diamond Offshore Drilling (NYSE:DO)
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Diamond Offshore Drilling Inc. (DO) ordered a moored semisubmersible rig from Keppel AmFELS shipyard in Brownsville, Texas, at an estimated cost of $300 million.

The rig, to be named the Ocean Onyx, will be able to operate in water as much as 6,000 feet deep and is scheduled for delivery in the third quarter of 2013.

The offshore drilling sector has had a challenging time since 2010's Deepwater Horizon disaster in the Gulf of Mexico, when a rig explosion killed 11 men and triggered a massive oil spill. U.S. authorities began approving deep-water drilling projects in February of last year, though the government's official moratorium was previously lifted.

The construction will use a Diamond Offshore cold-stacked unit--an existing rig that was shut down and put in storage--which should allow the Ocean Onyx to be built and placed into service in about half the time and at half the cost of current newly built rigs.

"No new capacity targeting the standard midwater and deepwater markets is currently under construction, and this rig should be ideally suited to meet emerging demand in this segment," said President and Chief Executive Larry Dickerson.

The oil driller reported in October its third-quarter earnings rose 29% as higher average day and utilization rates for high-specification floaters helped boost revenue 9.8%.

Shares closed Friday at $56.28 and were inactive premarket. The stock has fallen 20% over the past year.

-By Melodie Warner, Dow Jones Newswires; 212-416-2283; melodie.warner@dowjones.com

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