South Korea’s Hyundai Heavy Industries (HHI) has won a $655m contract from US-based Diamond Offshore Drilling to build an ultra-deepwater drillship.

The new vessel, which will be named Ocean BlackLion, will be built on the same design as Diamond Offshore’s other three ships currently on order with the South Korean shipbuilder, and is scheduled to be delivered in the fourth quarter of 2014.

The latest drillship will have a maximum hook-load capacity of 1,250t, dual activity capability and will be capable of operating at water depths up to 12,000ft, though initially it will be able to operate at a water depth of 10,000ft.

Diamond Offshore president and chief executive officer Larry Dickerson said that during 2012 the company has sold five jack-up rigs for a total of $95m, which is being reinvested in the company’s fleet.

"We believe this new drillship along with our four additional units under construction – the Ocean BlackHawk, Ocean BlackHornet, Ocean BlackRhino and Ocean Onyx – will be profitably employed in the deep and ultra-deepwater markets," Dickerson said.

The new vessel will be equipped with two seven-ram blowout preventer (BOP) stacks, while the second BOP will be installed for spare use.

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In addition, Diamond Offshore Drilling has signed a deal with HHI to install an additional seven-ram BOP on its ships, which are currently being built at the yard, to improve vessel reliability.

Each additional BOP will cost $34m bringing the average total price for each of the previously announced drillships to $640m.

Diamond Offshore said it has also completed the sale of four jack-up drilling rigs in two separate transactions.

All four units were held for sale in the company’s first-quarter financial results, where the Ocean Heritage was sold for $45m, the cold stacked mat-supported rigs Ocean Champion, Ocean Crusader, and Ocean Drake were together sold for $10m.

Last year, Diamond Offshore had ordered three drill ships from HHI, with design specifications including dynamic-positioning, five mud pumps, a maximum hook-load capacity of 1,250t and the ability to operate at a water depth of 12,000ft.