Our customers in the offshore drilling segment are generally major oil companies,
integrated oil and gas companies, state-owned national oil companies and independent
oil and gas companies. Ocean Rig UDW, together with its predecessor, Ocean Rig
ASA, have an established history with 185 wells drilled in 19 countries for
30 different customers.
Our assessment of a charterer's financial condition, creditworthiness, reliability
and track record are important factors in negotiating employment for our vessels.
We believe that our management team's network of relationships and more generally
TMS Bulker's reputation and experience in the shipping industry, as a successor
to Cardiff, which was in the business of providing commercial and technical
management for over 22 years, will continue to provide competitive employment
opportunities for our vessels in the future.
Our operations in the offshore drilling industry are geographically dispersed
in oil and gas exploration and development areas worldwide. Although the cost
of moving a drilling unit and the availability of drilling unit-moving vessels
may cause the balance between supply and demand to vary between regions, significant
variations do not tend to exist long-term because of rig mobility. Consequently,
we operate in a single, global offshore drilling market. Because our drilling
units are mobile assets and are able to be moved according to prevailing market
conditions, we cannot predict the percentage of our offshore drilling revenues
that will be derived from particular geographic or political areas in future
periods.
In recent years, there has been increased emphasis by oil companies to expand
their proven reserves and thus focus on exploring for hydrocarbons in deeper
waters. This deepwater focus is due, in part, to technological developments
that have made such exploration more feasible and cost-effective. Therefore,
water-depth capability is a key component in determining rig suitability for
a particular drilling project. Another distinguishing feature in some drilling
market sectors is a rig's ability to operate in harsh environments, including
extreme marine and climatic conditions and temperatures.
Our drilling units service the ultra-deepwater sector of the offshore drilling
market. Although the term "deepwater" as used in the drilling industry
to denote a particular sector of the market can vary and continues to evolve
with technological improvements, we generally view the deepwater market sector
as that which begins in water depths of approximately 4,500 feet and extends
to the maximum water depths in which seventh generation rigs are capable of
drilling, which is currently approximately 12,000 feet.
