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    ENSCO enters JV for rig

    News // December 15, 2000
    ENSCO International Incorporated has entered into a joint venture with KeppelFELS Limited through which ENSCO will acquire, for $30 million in cash andmanagement and procurement services, a 25 per cent ownership interest in a new harsh environment jack-up rig that is currently under construction.

    The rig, an enhanced KFELS MOD V design (an upgraded version of the ENSCO101 completed earlier this year) has been under construction at Keppel FELS'shipyard in Singapore since March 2000.

    The new rig, to be named the ENSCO 102, will be capable of working in water depths of up to 350 feet in the North Sea, and water depths in excess of 400 feet in milder environments such as the Gulf of Mexico or Southeast Asia.

    The total agreed cost of the rig will be approximately $130 million, withdelivery anticipated in early 2002.

    ENSCO will have an option to purchase the remaining 75 per cent interest in the new rig until two years after delivery. The option price will be based on the agreed cost until rig delivery, and thereafter will be subject to modest escalation in each of the two years remaining in the option period.

    Following delivery, ENSCO will manage the rig for the benefit of the joint venture, until the second anniversary of the delivery of the rig or until ENSCO exercises its purchase option.

    Carl Thorne, ENSCO's Chairman and Chief Executive Officer, commented onthe transaction, "This joint venture with Keppel FELS is in keeping with ourcommitment to carefully and intelligently increase our presence in the premiumjack-up market. As this rig is already under construction, we will not beadding to overall supply, while still enhancing our market leadershipposition".

    "The arrangement also allows us to expand our relationship with oneof our most significant preferred vendors, Keppel FELS. Our initial 25 per cent ownership in the rig will limit present exposure, while the purchase optionwill continue to offer the flexibility to add to the top end of our jack-upfleet at a very attractive cost," he concluded.

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