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Ensco Orders New Rig for $225M

Zacks Equity Research

A leading supplier of offshore contract drilling services, Ensco plc (ESV) has engaged Singapore’s Keppel Fels to construct a fourth jackup rig based on its KFELS B Class Bigfoot design.

The rig – ENSCO 110 – will be built under a fixed-price contract of approximately $225 million. The cost includes commissioning, systems integration testing and project management.

ENSCO 110 – scheduled for delivery in early 2015 – will be able to operate in water depths of 400 feet and drill up to a depth of 30,000 feet. It will be equipped with a nominal variable deck load of 7,500 kips as well as a cantilever load of 2,500 kips. The rig will also include a 1.5 million-pound derrick, TDS-8 top drive and 15k Blowout Preventer (:BOP).

The rig has been tailored by Ensco to include dual drilling fluid capability and the living quarters have been revamped to 6 one-person and 67 two-person rooms. Currently, Ensco has seven newbuild rigs on order, together with four jack-ups and three ultra-deepwater drillships.

Ensco strongly supports design standardization, which it believes facilitates staff in operating and preserving rigs more competently. This is evident in Ensco-operated rigs Ensco 106, Ensco 107 and Ensco 108, which are based on the KFELS B Class Bigfoot design.

Ensco’s constant efforts to upgrade its fleet create additional earnings potential for its shareholders. In view of the growing market for high-specification jackup rigs, the company is advantageously positioned to augment its operations as well as revenues.

Ensco carries a Zacks Rank #3, which is equivalent to a short-term Hold rating. However, there are other energy stocks – Stone Energy Corp (SGY), Range Resources Corporation (RRC) and NGL Energy Partners LP (NGL) – which carry a Zacks Rank #1 (Strong Buy) and are expected to outperform the market over the next few months.

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