SALE AND PURCHASE AGREEMENT ROWAN-MIDLAND THIS AGREEMENT CONTAINS PROVISIONS RELATIVE TO INDEMNITY, RELEASE OF LIABILITY AND ALLOCATION OR RISK

Exhibit 10.1

SALE AND PURCHASE AGREEMENT

ROWAN-MIDLAND

THIS AGREEMENT CONTAINS PROVISIONS RELATIVE TO INDEMNITY,

RELEASE OF LIABILITY AND ALLOCATION OR RISK

This Sale and Purchase Agreement (the “Agreement”) is dated effective as of the 19th day of October, 2005 (the “Effective Date”) and is by and between Rowandrill, Inc., a corporation organized under the laws of Texas, located at 2800 Post Oak Blvd., Suite 5450, Houston, Texas 77056 (hereinafter “Seller”), and ATP Oil & Gas Corporation, a corporation organized under the laws of Texas, located at 4600 Post Oak Place, Suite 230, Houston, Texas 77027 (hereinafter “Buyer”).

Seller has today agreed to sell and Buyer has today agreed to buy the following semi-submersible drilling unit:

Name: ROWAN-MIDLAND

Classification Society: ABS

Vessel Type: Semi-submersible

Flag: USA

Official Number: 575567

hereinafter called the “Drilling Unit” (as such term is more specifically defined herein) on the following terms and conditions:

1. DEFINITIONS

In this Agreement, unless otherwise provided, the following terms shall have the respective meanings set forth below (such definitions to be equally applicable to both the singular and plural forms of the terms defined):

(a) ABS : means the American Bureau of Shipping and any successor thereto.

(b) Ancillary Items: means any and all materials, equipment, tools, components, spare parts and equipment on board the Drilling Unit as of the Closing Date, excluding for the avoidance of doubt the Excluded Drilling Equipment and the Software (except as provided in Section 6.3), but including without limitation, HVAC equipment; the Computer Equipment, office equipment; galley equipment (excluding galley equipment owned by the third party caterer); televisions sets; radio, navigational and other communications equipment (excluding communications equipment owned by a third party); and recreation room equipment.

(c) Business Day: means a day on which banks are open for business in Houston, Texas and New York, New York.

(d) Buyer’s Liens : means liens, pledges, charges, leases, rights, security interests, claims, encumbrances, mortgages and debts of any nature whatsoever on the Vessel incurred by Buyer or its agents, representatives or contractors during the Interim Period or pursuant to operations under the Drilling Contract.

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(e) Certificate of Acceptance : means the Protocol of Delivery and Acceptance in the form of Exhibit E to be delivered on the Final Payment Date in respect of the Vessel.

(f) Charter Agreement: has the meaning set out in Section 4.2 of this Agreement.

(g) Claim(s) : means any and all liens, encumbrances, mortgages, debts, liabilities, obligations, losses, damages, penalties, interest, claims, actions, suits, legal proceedings, expenses (including reasonable legal fees) and disbursements arising from or in connection with damage to property and environmental and pollution claims, and/or injury to, disease or death of persons, or any other type of damage or loss.

(h) Closing : has the meaning set out in Section 4.1 of this Agreement.

(i) Closing Date : has the meaning set out in Section 4.1 of this Agreement.

(j) Computer Equipment : means the computer equipment on board the Drilling Unit as of the Closing Date, but excluding the Software.

(k) Delivery Location : has the meaning set out in Section 5.1 of this Agreement.

(l) Drilling Contract : means that certain Offshore Floating Production Unit and Daywork Drilling Contract, Mississippi Canyon 711, Offshore Gulf of Mexico dated the 26 ^th day of October, 2004 between ATP Oil & Gas Corporation as “Operator” and Rowandrill, Inc. as “Contractor”.

(m) Drilling Unit : means the ROWAN-MIDLAND, as described above in the preamble of this Agreement.

(n) Excluded Drilling Equipment : means equipment, and related spares and parts, removed from the Drilling Unit, as listed on Exhibit B attached hereto, in accordance with Section 6.

(o) Final Payment Date : has the meaning set out in Section 4.4 of this Agreement.

(p) FOI : means floating offshore installation.

(q) Gross Purchase Price : has the meaning set out in Section 3.1 of this Agreement.

(r) Insurance : means hull and machinery insurance (including removal of wreck/debris and collision liability) that Buyer is required to maintain on the Vessel pursuant to the Charter Agreement.

(s) Interim Payment(s) : has the meaning set out in Section 4.3 of this Agreement.

(t) Interim Period : means the period of time between the Closing Date and the Final Payment Date.

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(u) Marine Services Agreement : has the meaning set out in Section 4.2 of this Agreement.

(v) MODU : means mobile offshore drilling unit.

(w) Net Purchase Price : has the meaning set out in Section 3.1 of this Agreement.

(x) Permitted Assignee : has the meaning set out in Section 12 of this Agreement.

(y) Performance Deposit: has the meaning set out in Section 3.1(b) of this Agreement.

(z) Person : means any individual, corporation, a partnership of any type, estate, joint venture, association, joint-stock company, limited liability company or other entity of any nature whatsoever or government or any agency or political subdivision thereof.

(aa) Records : means all documentation, files and records, in any form or media, related to construction, ownership, operation and/or maintenance of the Vessel in possession of Seller or its affiliates or to which Seller or its affiliates have access, including without limitation, all the drawings of the Drilling Unit; all operating/maintenance manuals and records; licenses, certifications, and all logbooks, classification and inspection records; and as-built drawings, both original and those reflecting any modifications; but excluding information or records consisting of contracts, internal memoranda and correspondence with customers and daily maintenance and operations records.

(bb) Software : means software programs installed on the Computer Equipment, including but not limited to Microsoft Windows XP Professional and Office Professional and several programs developed by Seller such as the Personnel on Board Program, the Roster Program and the Safety Training Observation Program.

(cc) Vessel : means the Drilling Unit, and all Ancillary Items, including without limitation, the equipment described on Exhibit A, but excluding the Excluded Drilling Equipment and Software.

2. AGREEMENT TO SELL AND AGREEMENT TO BUY

Seller hereby agrees to sell the Vessel to Buyer and Buyer hereby agrees to purchase the Vessel from Seller subject to and on the terms and conditions set out in this Agreement.

3. PURCHASE PRICE

3.1 (a) The purchase price for the Vessel is SIXTY MILLION US DOLLARS ($60,000,000) (the “Gross Purchase Price”). The Gross Purchase Price shall be subject to reduction as provided for in Section 3.2 of this Agreement to determine the net purchase price (the “Net Purchase Price”), which shall be the amount to be paid by

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Buyer to Seller on the Final Payment Date. Ancillary Items (other than with respect to the Excluded Drilling Equipment and the Software) are included in the sale of the Vessel and no amounts over and above the Net Purchase Price as calculated herein shall be paid by Buyer to Seller on the Final Payment Date (as defined below) to acquire the Vessel; provided that on the Final Payment Date Buyer shall pay Seller, in addition to the Net Purchase Price, all undisputed amounts owed (if any) Seller under the Charter Agreement and the Marine Services Agreement.

(b) Upon execution of this Agreement, Buyer shall pay to Seller TEN MILLION US DOLLARS ($10,000,000) as a deposit on the Gross Purchase Price (the “Performance Deposit”), which is nonrefundable except as provided in Section 4.8 or Section 13.1.

(c) Upon execution of this Agreement and in addition to the Performance Deposit, Buyer shall pay Seller for fuel on board the Vessel as of the start of the Drilling Contract on August 3, 2005. As of August 3, 2005, the fuel on board the Vessel amounted to 78,876 gallons of diesel fuel at an assumed price of $1.7952 per gallon. As a result, Buyer will pay Seller $141,598.20. This amount shall not reduce or otherwise impact the Gross Purchase Price or the Net Purchase Price.

(d) Upon execution of this Agreement and in addition to the Performance Deposit, Buyer shall pay to Seller the amount of $120,715.20 for placement of the insurance as specified in Section 6(l) of the Charter Agreement. This amount shall not reduce the Gross Purchase Price or the Net Purchase Price.

3.2 In determining the Net Purchase Price, there shall be deducted from the Gross Purchase Price the aggregate amount of all Interim Payments made by Buyer pursuant to Section 4.3, the amount of the Performance Deposit, and the amount of any insurance proceeds paid to Seller for damage or loss of the Vessel pursuant to Article 6(c)(2)(B) of the Charter Agreement. The parties acknowledge and agree that the Gross Purchase Price is all inclusive and no taxes, fees, charges, duties or amounts of any other nature are applicable to the sale of the Vessel; provided that to the extent that any such taxes, fees, charges, duties or other amounts are by law payable by Buyer or are owed in connection with the sale of the Vessel, such amounts shall be in addition to the Gross Purchase Price and shall be paid by Buyer. For the avoidance of doubt, Buyer agrees that if the Vessel is not located beyond state territorial waters in the U.S. Gulf of Mexico on the Final Payment Date, Buyer shall pay any resulting sales tax. Seller agrees to cooperate with Buyer to take any reasonable steps that might minimize any sales tax that might be due with respect to this transaction.

4. CLOSING/PAYMENT TERMS & DOCUMENTATION

4.1 The sale and purchase of the Vessel upon the terms and conditions of this Agreement, and the other transactions contemplated by this Agreement, shall be consummated at a closing (the “Closing”) to take place at the Houston, Texas offices of Buyer (or such other location as may be mutually agreed) at 1:00 p.m. (local time) on or before October 19, 2005, provided that all of the conditions specified in this Agreement have been satisfied or waived, or at such other place, date and time as may be mutually agreed between the parties. The date and time on which the Closing occurs and the transaction contemplated by this Agreement becomes effective is referred to in this Agreement as the “Closing Date”.

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4.2 On the Closing Date, concurrently with execution of this Agreement, the following shall occur:

(a) the parties will enter into the Marine Services Agreement in the form attached hereto as Exhibit C (the “Marine Services Agreement”) and the Demise Charter Agreement in the form attached hereto as Exhibit D (the “Charter Agreement”).

(b) Seller shall deliver to Buyer an invoice for the first Interim Payment due pursuant to Section 4.3 of this Agreement;

(c) Seller shall deliver to Buyer a credit invoice reflecting the partial cancellation of Seller’s invoice #926638 dated September 15, 2005 in the amount of $1,275,000 with the credit invoice in the amount of $750,000;

(d) Seller shall deliver copies of the Records to Buyer and/or produce such Records for Buyer’s inspection prior to Closing (Buyer hereby acknowledges receipt of the Records);

(e) Seller shall deliver a certification of ownership (CG-1330) from the National Vessel Documentation Center of the U.S. Coast Guard (issued within 120 hours prior to the Closing Date) or other equivalent documentation showing that the Drilling Unit is at the time of Closing owned by Seller free and clear of all registered mortgages and encumbrances;

(f) Seller shall deliver a certificate of confirmation of class showing that the Drilling Unit is in class (such certificate to be issued within 120 hours prior to the Closing Date) and other classification certificates of the Drilling Unit showing that such class certificates are valid and unextended and any other class certificates required in order for Buyer to register the Drilling Unit in its name under the U.S. flag; and

(g) Seller shall deliver such other documentation as Buyer may reasonably request or as may be needed to effectuate the Closing.

(h) Buyer shall pay to Seller by wire transfer to Seller’s account (as shown in Section 4.3 below) the amounts set forth in Sections 3.1(b)-(d) above.

4.3 During the Interim Period, Buyer shall pay to Seller the amount of USD $1,050,000 per month (individually, an “Interim Payment” and collectively, the “Interim Payments”) pursuant to the Charter Agreement, and each such Interim Payment (including the pro-rated portion of any such payment made prior to Closing under the Drilling Contract, but pro-rated to apply to this Agreement as described below) shall be deducted from and credited against the Gross Purchase Price. At the time of the Closing, Buyer will have made a payment in accordance with Section 806 of the Drilling Contract for the monthly advance payment required in Section 806 for the month in which Closing occurs. That payment will be pro-rated so as to apply the pro-rated amount for the period of time prior to the Closing to the Drilling Contract and to apply the pro-rated amount on and after the Closing Date to this Agreement. Thereafter, the first Interim Payment shall be due and payable on the first Business Day of the month following the Closing Date based upon Seller’s invoice provided at Closing. Subsequent Interim Payments shall be due and payable on the first Business Day of each succeeding month during the Interim Period, as invoiced by Seller. Buyer shall pay the Interim Payments by wire transfer to Seller’s account at Citibank, N.A., ABA No. 021000089, Account No. 0006-9454.

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4.4 The Net Purchase Price shall be due and payable from Buyer to Seller on January 31, 2007; provided that Buyer shall have the right, in Buyer’s sole discretion and without penalty of any kind, to pay the Net Purchase Price at any time prior to January 31, 2007, upon 30 day’s prior written notice to Seller, and the date on which the Net Purchase Price is paid shall be referred to in this Agreement as the “Final Payment Date.” Subject to Section 3.2, payment of the Net Purchase Price to Seller by Buyer shall constitute a full and complete discharge of any obligation of Buyer with respect to the payment of any amounts constituting the Gross Purchase Price or the Net Purchase Price. Simultaneously with payment of the Net Purchase Price, title to the Vessel shall pass to Buyer and Seller shall deliver the documentation and other items provided for in Section 10.

4.5 At least 30 days prior to the Final Payment Date, Buyer shall provide to Seller the Buyer’s estimate as to the amount of the Net Purchase Price to be paid on the Final Payment Date, as well as any amount owed (if any) to Seller under the Charter Agreement or the Marine Services Agreement. Such estimate shall take into account all Interim Payments expected to be paid prior to the Final Payment Date to be subtracted from the Gross Purchase Price. Within 10 days of receipt of such estimate, Seller shall advise Buyer of its agreement with such estimate or if not in agreement, Seller shall advise specifically the items of such estimate with which Seller is not in agreement. Buyer may, at its sole discretion, pay the amount which Seller calculates as the Net Purchase Price and receive immediately title to the Vessel without waiving its objections or the rights to recovery with respect to Seller’s calculation of the Net Purchase Price. As to any disagreement regarding the Net Purchase Price, the parties shall promptly enter into discussions to attempt to resolve any differences. The parties acknowledge that Buyer will be providing only an estimate of the Net Purchase Price and the Net Purchase Price shall be calculated with reference to the actual amounts to be deducted from the Gross Purchase Price as determined in accordance with the provisions of this Agreement.

4.6 If Buyer refuses or is unable for any reason (including failure to obtain financing) to pay the Net Purchase Price in accordance with the terms of this Agreement, other than due to an exercise of Buyer’s rights under Article 13, Seller shall be entitled to exercise either of the following remedies:

(a) It is specifically agreed that due to the unique nature and use of the Vessel as an FOI and the irreparable damages both parties agree that Seller will suffer should Buyer fail to perform its obligations under this Agreement, Seller may in its sole and exclusive discretion exercise all remedies available to it at law or in equity for any failure by Buyer to consummate the sale of the Vessel in accordance with the terms of this Agreement. Accordingly, Buyer agrees that specific performance and injunctive relief, alone or in combination, are appropriate remedies for any breach of this Agreement by Buyer in connection with Buyer’s obligation to consummate the sale of the Vessel as provided in this Agreement and that Seller may obtain specific performance or injunctive relief without proof of actual damages or the posting of a bond and any court of competent jurisdiction is specifically authorized to order specific performance, grant injunctive relief or any other remedy necessary or appropriate to consummate the transaction contemplated by this Agreement. The granting of specific performance, injunctive relief or any other remedy shall be without prejudice to any other claim or remedy Seller may have for Buyer’s breach of this Agreement.

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(b) Alternatively, Seller may in its sole discretion (1) retain the Performance Deposit and all Interim Payments made by Buyer to Seller as agreed liquidated damages and not as a penalty, (2) retain title to the Vessel without any further obligation to Buyer, and (3) terminate the Charter Agreement and Marine Services Agreement. In such case Seller shall have no further recourse of any nature whatsoever against Buyer. Buyer and Seller hereby acknowledge and agree that Seller would be damaged by such breach of this Agreement by Buyer, that it would be extremely difficult to ascertain the actual damages incurred by Seller resulting from such breach, and that such liquidated damages specified in this Section 4.6(b) are a fair and reasonable estimate of the damages.

(c) Regardless of which remedy Seller exercises, Buyer shall deliver to Seller copies of all then existing drawings and documentation relating to Buyer’s conversion of the Vessel to an FOI that have not previously been provided to Seller. Notwithstanding such delivery, such documents shall remain the property of Buyer.

4.7 It is specifically agreed that due to the unique nature and use of the Vessel as an FOI and the irreparable damages that both Parties agree that Buyer will suffer should Seller fail to perform its obligations under this Agreement, Buyer shall be entitled to all remedies available to it at law and in equity for any breach by Seller of Seller’s obligation to transfer title to the Vessel to Buyer in accordance with the provisions of this Agreement. Accordingly, Seller agrees that specific performance and injunctive relief, alone or in combination, are appropriate remedies for any breach of this Agreement by Seller in connection with Seller’s obligation to transfer title to Buyer as provided for in this Agreement and that Buyer may obtain specific performance or injunctive relief without proof of actual damages or the posting of a bond and any court of competent jurisdiction is specifically authorized to order specific performance, grant injunctive relief or any other remedy necessary or appropriate to carry out the transfer of the Vessel as contemplated by this Agreement. The granting of specific performance, injunctive relief or any other remedy shall be without prejudice to any other claim or remedy Buyer may have for Seller’s breach of this Agreement.

4.8 Alternatively to Section 4.7, if Seller refuses, or is unable for any reason, to execute the bill of sale and transfer title to the Vessel to Buyer upon Buyer’s tender of the Net Purchase Price to Seller, then Buyer shall have (i) the right to receive a refund of the Performance Deposit (but not the Interim Payments) and (ii) the option to terminate this Agreement and continue to operate under the Charter Agreement for the duration of Buyer’s operations in the Mississippi Canyon Block area subject to renegotiation of the rates for operations after January 31, 2009.

4.9 Prior to and following the Closing, Seller shall make a reasonable number of its personnel available to Buyer to respond to questions or provide information with respect to the Vessel as may be reasonably necessary to assist in the transition of possession of the Vessel to Buyer.

4.10 In the event that Seller determines that, as a result of the Vessel’s operations following the Closing Date in state waters, a tax payment is due to a taxing authority or receives an assessment of tax from a taxing authority, Seller will notify Buyer of such tax and Buyer will be responsible for the payment of such tax.

5. DELIVERY LOCATION/CONDITION OF VESSEL

5.1 On the Closing Date, pursuant to the Charter Agreement, Seller shall turn

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over possession of the Vessel to Buyer or Buyer’s designated representative (it being understood that such designated representative may be Seller or an affiliate thereof pursuant to the Marine Services Agreement). Delivery of the Vessel shall be at the then current location of the Vessel or the various components thereof, or such other location as may be mutually agreed (the “Delivery Location”).

5.2 As of the Closing Date, the Drilling Unit is under construction pursuant to the Drilling Contract for conversion of the Drilling Unit from a MODU to a FOI. Following the Closing Date, Seller acknowledges and agrees that Buyer shall have the right to continue to modify the Drilling Unit for use as an FOI. Buyer hereby acknowledges that in the event the Drilling Unit has any outstanding recommendations from ABS for repairs or maintenance and/or outstanding surveys, Buyer hereby accepts the Drilling Unit with such outstanding recommendations and/or outstanding surveys, and Seller is not obligated to take any action regarding such outstanding recommendations and/or outstanding surveys. At Closing, Seller shall deliver the Vessel to Buyer under the Charter Agreement “as is, where is, with all faults and defects” at the Delivery Location. The Vessel shall have valid documentation as required by the ABS and the United States Coast Guard, as applicable. This sale does not include any shipyard modification services and Buyer assumes full responsibility for such.

5.3 NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE SALE OF THE VESSEL PURSUANT TO THIS AGREEMENT IS AS IS, WHERE IS AND WITH ALL FAULTS AND DEFECTS, PATENT, LATENT OR OTHERWISE. SELLER MAKES NO GUARANTY, WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE, AS TO THE QUALITY, SERVICEABILITY, MERCHANTABILITY OR CONDITION OF THE VESSEL, OR ITS FITNESS FOR ANY PARTICULAR USE OR PURPOSE. BUYER AGREES THAT NO GUARANTY, WARRANTY OR REPRESENTATION HAS BEEN EXPRESSED OR IMPLIED BY SELLER AND THAT BUYER, PRIOR TO THE CLOSING DATE, HAS HAD FULL OPPORTUNITY TO INSPECT THE VESSEL AND UNDERSTANDS THAT SUCH VESSEL IS BEING PURCHASED ON AN “AS IS, WHERE IS, WITH ALL FAULTS AND DEFECTS” BASIS. SELLER MAKES NO GUARANTY, REPRESENTATION OR WARRANTY WITH RESPECT TO THE CONVERSION OF THE DRILLING UNIT FROM A MODU TO A FOI.

6. REMOVAL OF EXCLUDED DRILLING EQUIPMENT AND SOFTWARE

6.1 Seller shall, at Seller’s cost (except as provided below), remove the Excluded Drilling Equipment; provided, however, that:

(a) removal of such Excluded Drilling Equipment shall not involve cutting or other modifications of the Vessel that would compromise the structural integrity of the Vessel, in Buyer’s sole and reasonable opinion;

(b) Seller shall repair and/or re-paint any damaged coating resulting from removal of the Excluded Drilling Equipment to Seller’s existing standards;

(c) all reasonable third party costs incurred by Seller to remove the Excluded Drilling Equipment (i.e., a crane barge to remove the mast) shall be for the account of Buyer, and Buyer shall pay such costs within thirty (30) days of receipt of an invoice from Seller properly documenting such third party costs; and

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(d) if all or any part of the Excluded Drilling Equipment has not been removed by such time as Buyer is ready to mobilize the Vessel to its intended offshore location, Seller shall be deemed to have waived its right to remove the Excluded Drilling Equipment and such remaining equipment shall be included in the sale and purchase of the Vessel.

6.2 Immediately following the Closing, Seller shall commence removing the Excluded Drilling Equipment and shall prosecute such operations with due diligence through to completion. Seller agrees that, to the extent possible, such equipment shall be removed using equipment at Seller’s yard in Sabine Pass, Texas.

6.3 To the extent that:

(a) the Software is licensed from third parties, and Buyer obtains its own license to such third party Software prior to the termination of the Marine Services Agreement, or

(b) the Software is proprietary to Seller, and Seller and Buyer negotiate a license or licenses to such proprietary Software prior to the termination of the Marine Services Agreement, then Seller shall not remove such Software from the Vessel upon termination of the Marine Services Agreement. Otherwise, Seller shall remove the Software from the Vessel upon termination of the Marine Services Agreement.

7. WARRANTY OF TITLE; NO LIENS OR ENCUMBRANCES

At the time of Closing and on the Final Payment Date, Seller warrants, covenants and agrees that the Seller is the sole owner of the Vessel, that the Seller has good and marketable title to the Vessel, and that the Vessel is free and clear of all liens, encumbrances, mortgages and debts of any nature whatsoever (other than Buyer’s Liens). Seller covenants that during the Interim Period, Seller shall not sell, bargain, convey or assign the Vessel, nor permit any lien, encumbrance, mortgage or debt of any nature to be placed thereon (other than Buyer’s Liens), such that upon payment of the Net Purchase Price on the Final Payment Date, Seller shall deliver good and marketable title to the Vessel to Buyer, free and clear of all liens, encumbrances, mortgages and debts of any nature whatsoever (other than Buyer’s Liens) and the bill(s) of sale delivered pursuant to Section 10.1 shall contain such a warranty. If Seller shall breach the foregoing covenant not to permit any lien, encumbrance, mortgage or debt of any nature to be p