Rowan Exercises Option to Build Fourth Ultra-Deepwater Drillship

Rowan Companies

announced today that it has exercised its option to build a fourth GustoMSC P10,000 design ultra-deepwater drillship with Hyundai Heavy Industries Co., Ltd. ("HHI") with delivery scheduled in March 2015.  (Logo: http://photos.prnewswire.com/prnh/20120827/DA62568LOGO) The cost for this rig, including commissioning, project management and spares, but excluding capitalized interest, is estimated to be approximately $620 million.  This cost compares to peer companies' previously announced 12,000 foot capable rigs equipped with 10,000 feet of riser.  Rowan plans to equip its drillships with 2,000 feet of additional riser to enable operations in water depths up to 12,000 feet upon delivery.  Each drillship will also be equipped with a second BOP for minimizing non-productive time.  The Company will also incur operational training and personnel ramp-up costs in readying the drillships to commence well operations.  Expected costs for the additional riser, BOP and training and ramp-up costs will be approximately $75 million.  Total cost for the Company's fourth drillship will be approximately six percent higher than the Company's first three drillships primarily due to equipment price increases and projected labor cost increases.  The agreement with HHI also includes an