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BP P.L.C.

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Bp Adr : Parker Drilling Receives Letter of Intent for Two Newbuild Alaskan Drilling Rigs

05/06/2008 | 07:50am EDT

HOUSTON, May 6 /PRNewswire-FirstCall/ -- Parker Drilling Company (NYSE: PKD), announced today that a subsidiary of BP PLC (NYSE: BP) has issued a Letter of Intent to a Parker subsidiary for a drilling contract that will require two newbuild land rigs for a development drilling program in Alaska.

A five-year drilling contract, with a five-year option, is expected to be executed by the end of the month. Operations are anticipated to commence during the second half of 2010, following construction and mobilization to the North Slope.

Revenues related to the project are expected to be in excess of $250 million during the initial five-year term, including mobilization fees and customer-reimbursed equipment.

David C. Mannon, Parker Drilling's president and chief operating officer, said, "Parker has a 40-year history of cutting-edge arctic drilling technology. Our record-breaking performance for the Sakhalin-1 consortium and for numerous other arctic exploration programs makes Parker the most qualified partner for frontier exploration projects.

"These rigs are designed to reduce the total well cost for the customer through faster well times and mobilization while reducing the environmental impact, true to our strategic plan of providing a fleet of advanced rigs preferred by our customers in all market conditions."

The new arctic-class rigs incorporate some of the most advanced features available in the global land rig market, including:

    -- Safety-engineered state-of-the-art equipment package, which reduces
       vibration, noise, and personnel hazards;
    -- Rigs designed from targeted benchmark well data incorporating
       technology to decrease well times resulting in increased number of
       wells per year;
    -- On-board command center centralizing decision-making processes;
    -- Fully automated drilling system featuring fuel-efficient AC technology
       and variable frequency drive, substantially reducing emissions,
       automating the drilling process and enhancing power delivery;
    -- Fully enclosed rig modules for operation in arctic conditions down
       to -50°F;
    -- Design composed of three lightweight Drilling, Mud and Utility modules,
       enabling the entire rig to be moved in only three loads, resulting in
       increased mobility and faster rig-up;
    -- Offline pipe handling, enabling faster well times;
    -- Zero-discharge capabilities and reduced loading on roads and drill
       sites, reducing overall environmental impact.

The Company anticipates financing a portion of the cost of the two newbuild rigs with a new senior credit facility that will provide for an $80 million revolving credit facility and a new $50 million term loan. The Company expects to receive commitments from existing and new banks that will comprise the lenders to the new senior credit facility by mid-May 2008.

Parker Drilling Company (NYSE: PKD) provides high-performance contract drilling solutions, rental tools and project management services to the worldwide energy industry. Parker operates 27 land rigs in strategic international markets and 17 offshore barge rigs, primarily in the U.S. Gulf of Mexico transition zone. The Company's Quail Tools division rents premium equipment to operators in active land and offshore markets in North America. Founded in 1934, Parker has set numerous world records for deep and extended-reach drilling and is an industry leader in safety performance. More information about Parker Drilling can be found at http://www.parkerdrilling.com.

This release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, including the execution of the five year drilling contract for construction and operation of two new drilling rigs and the receipt of commitments from lenders and the execution of a $130 million senior credit facility with an increased revolving credit facility and a new term loan, are forward- looking statements. Although the Company believes that its expectations stated in this release are based on reasonable assumptions, actual results may differ materially from those expressed or implied in the forward-looking statements. For a detailed discussion of risk factors that could cause actual results to differ materially from the Company's expectations, please refer to the Company's reports filed with the SEC, and in particular, the Annual Report on Form 10-K for the year ended December 31, 2007. Each forward-looking statement speaks only as of the date of this release, and the Company undertakes no obligation to publicly update or revise any forward-looking statement.

SOURCE Parker Drilling Company


© PRNewswire 2008
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