Vantage Drilling (Vantage) has signed an agreement with Valencia Drilling (Valencia) to acquire the rights and obligations of an under construction ultra-deepwater drillship called Dragonquest for $164m.

After completion of the acquisition, Vantage will be responsible for paying the remaining construction-related costs including the purchase price for the drillship, which totals to about $800m.

Final construction payment of the vessel, project costs, equipment, and spares, and the total delivered, in-service cost of the project will be included in the remaining costs.

The company has also agreed to pay up to $5m of Valencia’s costs and expenses at closing of the acquisition, which is subject to specified closing conditions.

Vantage Drilling chairman and CEO Paul Bragg said that the acquisition of Dragonquest will allow the company to build an advanced offshore drilling fleet.

"We have managed the project since its inception in 2008, so we have the highest confidence in the quality and capabilities of the asset we are buying," Bragg said.

"Beginning in the third quarter of 2012, we expect the Dragonquest to generate $140 to $150 million of EBITDA per year or approximately $1.2 billion over the life of this contract."

Daewoo Shipbuilding & Marine Engineering (DSME) has built the Dragonquest in Okpo, South Korea, while the delivery of the vessel and the closing of the deal are scheduled for April this year.

After delivery, the vessel is expected to be used in the US Gulf of Mexico, pursuant to an eight-year contract with Petrobras.

The drillship which will have a length of 781m, width of 137m and a deck load capacity of carrying 20,000t, and will be able to drill in water depths of up to 10,000ft, with a total vertical drilling depth of up to 40,000ft.