LeTourneau lands three-rig deal

Published 12:00 am Wednesday, July 31, 2002

Bennie Reed and Samuel Mejia work on a Super Gorilla VIII rig at Vicksburg’s LeTourneau Inc. Tuesday. (The Vicksburg Post/Jon Giffin)

[07/31/02]An order to build three more in a new class of jack-up drilling rigs should keep Vicksburg’s LeTourneau Inc. in business, at least until sometime in 2006.

LeTourneau’s parent, Rowan Companies, announced the order from its offices in Houston, Texas, where final outfitting of the offshore rigs takes place.

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The rigs are in the Tarzan class and the orders will be filled following the one already in the preliminary stages of construction on the company’s vast yard on the banks of the Mississippi just south of Vicksburg. The four-rig deal is worth about $300 million and it takes about 1,000 employees to build each rig.

Since 1955, LeTourneau has been the major supplier of the jack-up rigs used to explore for oil and gas in deep and turbulent waters all over the world. There have been several classes of the rigs, including the Super Gorilla class that was designed to drill in water up to about 500 feet deep and withstand virtually any wind and wave conditions.

The company launched Super Gorilla VII in the summer of 2001 and Super Gorilla VIII is being built now and has a delivery date of April 2003.

In the announcement, Rowan officials said the new Tarzan class is designed to drill in water up to 250 feet deep and will be more efficient in drilling to beyond 15,000 feet below the ocean floor.

Of the more than 50,000 wells drilled to date within this water depth in the Gulf of Mexico fewer than 10 percent have reached a drilling depth greater than 15,000 feet. Over the past several months, Rowan jack-ups have increasingly been used on such shallow-water, deep gas wells.

“It has been one year since Rowan committed to the design and construction of a new class of drilling rig, specifically designed for wells to be drilled in the 15,000 to 30,000 foot depth range on the U.S. Continental Shelf,” said Bob Palmer, Rowan chairman and chief executive officer.

Donald Cross, vice president in charge of the LeTourneau operation, said he planned to lay the keel of the first Tarzan, named Scooter Yeargain, in January 2003, although some components are already being built now.

With the addition of the three new orders, LeTourneau will have a total of four Tarzans on its books and ensure work for four years.

“We have 948 people at work now,” Cross said. “That’s 652 full-time and the rest are contract workers because we can’t get any more full-time workers.”

Before its purchase by Rowan, LeTourneau was owned by Marathon Inc. which closed it down in 1992. Rowan bought the company and reopened the Vicksburg operation in 1994.