HOUSTON, March 6 /PRNewswire-FirstCall/ -- TODCO (the "Company") today announced the signing of a two-year drilling contract for its drilling rig, THE 205 with PEMEX in Mexico. Dayrates for the two-year contract with PEMEX will be adjusted quarterly principally based on the published United States Gulf of Mexico dayrates for 200-foot mat-supported cantilevered rigs plus $20,000. The contract is scheduled to commence in late October 2007, however, it could start earlier pending completion of ongoing repairs.
The rig is currently in a shipyard in Veracruz, Mexico where it is undergoing leg and helideck repairs as a result of an incident that occurred in December 2006 when a cargo vessel struck the rig. Total costs for the rig repairs and tug costs while the rig was standing by to be towed into the shipyard for repairs are estimated to be about $8 million. We have filed suit against the cargo vessel owner and are attempting to recover these costs from the vessel owner.
Jan Rask, President and Chief Executive Officer, said, "We are pleased with the signing of this contract for THE 205 and the opportunity to continue our relationship with PEMEX."
Statements regarding the repairs of our THE 205 rig, anticipated revenues, 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 reactivation and mobilization costs, estimated reactivation and mobilization times, contract performance, governmental actions 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".
