press release

Texaco Press Release - Texaco Contracts New Deepwater Drilling Rig for Gulf of Mexico

Rig Will Be Capable of Drilling in 10,000 Feet of Water


NEW ORLEANS, Dec. 17 - Texaco is adding a new-generation, deepwater semi-submersible drilling rig - the Sedco Energy - to its Gulf of Mexico operations fleet, it was announced today by Claire S. Farley, Vice President of Texaco Inc. and President of Texaco North American Production.

Under the terms of the contract with the rig's owner, Sedco Forex, Texaco will hold exclusive rights for five years of drilling in the Gulf beginning in late 1999. Sedco Forex is a unit of Schlumberger Technology Corporation. Terms of the contract were not disclosed.

The Energy is a fully integrated, dynamically positioned drilling rig capable of drilling in water depths up to 10,000 feet. The rig will be assigned to drill deepwater prospects for Texaco in various locations in the Gulf of Mexico and throughout the world.

"The Energy will be the third world-class drilling rig working for Texaco in the highly competitive deepwater Gulf," said Farley. "These drilling rigs provide the essential support we must have to facilitate the timely drilling and appraisal of Texaco's significant acreage portfolio in this important area of the world."

Drilling Rig and Lease Portfolio

The Energy joins two other deepwater rigs under contract to Texaco. The Ocean Star, 100 percent-contracted by Texaco, is presently drilling at the Fuji Prospect in Green Canyon 506. The Glomar Explorer, in which Texaco shares 50 percent, is in the final stages of conversion at a Mobile, Ala., shipyard and will be ready for drilling in the Gulf in February, 1998.

"The Gulf of Mexico is an important part of our worldwide upstream growth strategy and the availability of rigs is an issue Texaco has aggressively managed in order to quickly and cost effectively develop the many promising opportunities in our Gulf lease portfolio," added Farley.

Texaco has an interest in 354 leases in water depths of 1,300 feet or greater, placing the company among the leaders in the amount of deepwater acreage leased. Of that number, 31 leases are located in water depths greater than 7,500 feet.

Design Features

The Energy will take approximately 24 months to construct. Sedco Forex is utilizing a new design that places the rig floor on the aft portion of the vessel. This new feature provides more rig floor area that can accommodate large amounts of tubulars in the derrick. The design also allows subsea completion enhancements that will permit critical operations to be completed off-line resulting in lowering of drilling costs and a more efficient, safe operation.

The rig's layout and drilling processes also are being designed to minimize risks to health, safety and the environment. The rig will feature zero-discharge, fail-safe containment systems and noise and vibration abatement technology that provide a more comfortable and healthy working environment for crews.

Updated: December 1997