Soumya Mutsuddi, Esgian

This week Enauta secured semisub Alpha Star for drilling offshore Brazil, while Vår Energi plans to borrow Cat-D semisub Transocean Enabler from Equinor for drilling offshore Norway. Meanwhile, TotalEnergies announced its decision to withdraw as operator from the North Platte project in US Gulf of Mexico, while Norway approved Aker BP's PDO for the Kobra East & Gekko (KEG) project.

Contracts 

Enauta has contracted 2011-built 6th gen. semisub Alpha Star for drilling of the fourth well of the Early Production System (“EPS”) at the Atlanta Field offshore Brazil. Drilling of the fourth well is estimated to commence in the fourth quarter of 2022 and the company expects the duration to be approximately 60 days. Enauta also indicated that the contract could be extended for another 150 days, subject to Board approval, to include the drilling of the other two producing wells and lines relocation. Enauta entered into a time services agreement with Serviços de Petróleo Constellation S.A. and charter agreement with London Tower Management BV for the contracting of the Alpha Star. Enauta indicated that the overall amount estimated and approved is $23 million for one well. Enauta is the operator of the Atlanta Field located in the Block BS-4 in the Santos Basin, offshore Brazil.

Vår Energi plans to use Cat-D semisub Transocean Enabler to undertake drilling of two production wells at the Goliat field in the Norwegian Barents Sea this year. The rig, which is committed to Equinor until 2024, will be sublet out to Vaar for one well (D-4) in May and the second well (C-4) starting in September or October. The wells are expected to take 47 and 49 days, respectively, to drill.

TotalEnergies announced its decision not to sanction and withdraw from the North Platte deepwater project in the US Gulf of Mexico. The decision was taken as the Company has better opportunities of allocation of capital within its global portfolio. TotalEnergies as operator held a 60% interest in North Platte, alongside Equinor with 40% interest. TotalEnergies will resign as operator which will be effective following a short transition period to ensure an orderly hand-over of operatorship. Last year, TotalEnergies contracted the ultra-deepwater drillship Valaris DS-11 for the North Platte project. The cold-stacked drillship was expected to go through a reactivation period and install a 20K BoP among other upgrades. However, the contract contained a termination provision should the project not go through.

Market sources indicate that jackup Valaris Norway will remain on hire with Harbour Energy undertaking accommodation support work for another 30 to 60 days. The rig commenced work with the operator in late November. 

Drilling and discoveries

The Petroleum Safety Authority Norway has given Equinor consent for exploration drilling in block 35/10 in the North Sea. The consent relates to well 35/10-8 S in production licence 293, with the prospect name being Kveikje n`Roll. Drilling is to be carried out by Odfjell Drilling 6th gen. deepwater and harsh environment semisub Deepsea Stavanger as part of its current contract with Equinor.

National Petroleum Corporation of Namibia (NAMCOR) and its partners Shell and Qatar Energy have announced discovery of light oil in The Shell-operated Graff-1 exploration well in the Orange Basin, offshore Namibia. Drilling operations were carried out by the 7th gen. drillship Valaris DS-10. NAMCOR also anticipates that further exploration activity, including a second exploration well, will be required to determine the size and recoverable potential of the identified hydrocarbons.

Ultra-deepwater drillship Maersk Viking is preparing to imminently start its drilling campaign at the Gumusut-Kakap field offshore Sabah, Malaysia, for Shell. The rig will remain at the field until end of August 2022. The rig will also be put out to work with TotalEnergies and Petronas this year. 

Demand

Cooper Energy has updated the prospective resource assessment of its Otway Basin exploration portfolio, following interpretation of newly reprocessed 3D seismic exploration data which has validated the company’s low risk prospectively and high graded some new opportunities. Following the updated interpretation, the aggregated mean unrisked resource potential for six amplitude-supported exploration prospects is 585 billion cubic feet of gas on a gross mean basis. These prospects are (1) Elanora in Block Vic/L24 with estimated mean unrisked prospective resource (MUPR) of 161 Bcf and chance of finding gas estimated at 67% (2) Isabella in Block Vic/L24 with estimated MUPR of 149 Bcf and chance of finding gas at 70% (3) Heera in Vic/P24 with estimated MUPR of 86 Bcf and a chance of success of 63% (4) Pecten East in Vic/L33 with potential of 76 Bcf and chance of success at 73% (5) Nestor in Vic/P76 at 64 Bcf and chance of success at 81% (6), and Juliet in Vic/L24 at 49 Bcf and chance of success at 84%. As per Cooper, all prospects lie within 60 to 80 m. of water depth and are located no further than 8 km. from tie-in points on the Casino Henry Netherby (CHN) subsea gas pipeline which transports gas to the Athena Gas Plant. In a success case, the prospects would be tied into the CHN pipeline via a subsea production system. Cooper also added that a decision on the timing of exploration drilling will be made having regard to drilling rig availability and funding optimisation. Upstream has quoted a spokesperson from Cooper indicating that a "highly indicative timing" of any drilling could be from about 12 months from now. Also, that a multi-well drilling campaign would be preferable however if there is a rig of opportunity, Cooper will investigate joining another company’s campaign.

Aker BP is planning to drill 13 exploration wells in 2022, with unrisked volume potential estimated at around 250 mmboe net to the company. The capex for 2022 is estimated around $1.6 billion, while the exploration spend earmarked for the year is around $400 million. Aker BP also indicated that it will continue to progress its portfolio of field development projects, and several key milestones are planned in 2022, including first oil from Hod and Johan Sverdrup Phase 2, and final investment decisions and PDO submissions for NOAKA, Valhall NCP & King Lear, Skarv Satellites, and Trine & Trell.

Jadestone Energy has set it capex for 2022 at $90-105 million, comprising mainly the Stag infill programme where the company plans to drill two infill wells. Jadestone is the 100% owner and operator of the Stag oilfield, offshore Australia.

While reporting financial results for 2021, DNO indicated that it will participate in drilling the Shell-operated Edinburgh exploration well in the UK North Sea and six additional prospects offshore Norway, during 2022. Also in Norway, the DNO-operated Brasse project as well as the partner-operated Iris-Hades, Gjøk and Orion discoveries will be targeted for sanction in 2022.

Mobilisation

JV partner Carnarvon Energy announced that 2014-built jackup Noble Tom Prosser has arrived at the Pavo-1 well site in the WA-438-P exploration permit offshore Australia. The rig has completed pre-drill preparations and is about to commence drilling. Following completion of the Pavo-1 well, the rig will drill the Apus-1 well which is located around 20km south-west of the Pavo-1 well location. Carnarvon holds 30% interest in licence WA-438-P while Santos is the operator and holds 70%.

The 7th gen. drillship Valaris DS-8 is currently on the move and is understood to be en route to Las Palmas in the Canary Islands. The rig has been stacked in the UK since mid-2020. The relocation is understood to be driven by the availability of space at the Las Palmas port, with three Valaris rigs expected to leave the port imminently.

Harsh-environment semisub Transocean Barents has now mobilised to the Norwegian Ormen Lange field for a new campaign with Shell. The rig will undertake a 200-day drill, covering two wells at the field. The rig last worked for MOL offshore Norway from May through July 2021. 

Financial

Maersk Drilling’s revenue for 2021 increased to $1,267 million from $1,096 million reported in 2020, driven by higher utilisation and day rate partly offset by lower uptime. The company’s EBITDA reported for 2021 was $325 million, increasing from $247 million reported in the previous year. Maersk Drilling reported a profit of $291 million for 2021 against a loss of $1,653 million reported in 2020. For 2021, the company’s reported capital expenditures were $102 million compared to $162 million reported in 2020. For 2022, the company’s guidance for capital expenditure is in the range of $120-140 million. At the end of 2021, the contract backlog amounted to USD1.9 billion (compared to USD1.3bn in 2020), of which USD604 million is for execution in 2022. In addition, since the beginning of 2022 Maersk Drilling has secured additional contracts with a total value of approximately USD100 million.

For the full year 2021, ADNOC Drilling’s revenue increased by 8.2% to $2.27 billion compared to 2020, with Year-on-year revenue growth was led by the onshore segment.  Full year EBITDA was $1.047 billion, with a margin of 46.1%, while net profit for the full year was $604 million, increasing by 6% year-on-year. The company’s offshore jackup segment reported revenue of $596 million for full year 2021, which was broadly flat compared to 2020 revenue of $597 million. The segment’s revenue for the fourth quarter of 2021 was $146 million, decreasing by 5% compared to the same period in 2020 due to the retirement of 3 rigs and delays in replacement of rented rigs with owned rigs.

Other Market news

Eco Atlantic has signed a Sale and Purchase Agreement (SPA) to acquire the South Africa and Namibia-focused oil firm Azinam, in return for a 16.5% equity stake in the enlarged company. As per Eco Atlantic, the acquisition is expected to complete in two to three weeks pending TSX-V approval, at which time a further announcement will be made. Through the acquisition Eco Atlantic will acquire 50% working interest and operatorship in Block 2B in the Orange Basin offshore South Africa. Eco Atlantic will also acquire a material working interest of 20% in the deepwater block 3B/4B and the shallow water and nearshore blocks 3B/4B. Offshore Namibia, Eco will acquire additional working interests in its current oil blocks where Azinam is a partner, which includes Petroleum Exploration Licenses ("PELs") #97, #98 and #99. Eco's resultant net working interest in these PELs will be 85% on completion. Working Interest on these blocks are the same as its existing interest in PEL #100, and Eco is the operator on all four PELs. Gil Holzman, Co-Founder and CEO of Eco Atlantic commented: "We are very pleased to have signed the final definitive SPA to acquire Azinam Group. This now puts the Company a step further towards joining all of Azinam's offshore exploration acreage into our broader portfolio. We are working towards drilling a well on Block 2B, a highly prospective play in the Orange Basin, offshore South Africa, close to the recent discovery by Shell and Qatar Energy in the Orange Basin in Namibia. The well is planned for the second half of this year. The Company also anticipates drilling a further exploration well in Guyana following this.”

Borr Drilling has announced that its current Chairman of the Board, Paal Kibsgaard, has decided to step down from his role due to other work-related commitments, while continuing to serve as a regular Board Member. The Board has elected Vice Chairman Tor Olav Troim, to be the new Chairman of the Board. Troim was previously Chairman for Borr Drilling from establishment of the Company until 8 October, 2019.

TPAO has successfully completed a second flow test on a critical appraisal well at its Sakarya gas project in the Black Sea, offshore Turkey. A second reservoir probed by the Turkali-1 appraisal well flowed gas at a rate of 21.9 million cubic feet per day, with TPAO reporting that these results “proved excellent well deliverability and reservoir connectivity." In total, flow tests were carried out at two appraisal wells and over five different reservoirs. Data acquired from the flow tests are being evaluated to further optimise field development and FEED. The Türkali-1 well was drilled to a total depth of 3,920 m. by the 6th gen drillship Fatih, while well flow tests in the field are being conducted by another TPAO-owned 6th gen. drillship Kanuni. 

The Ministry of Petroleum and Energy, The Gambia, has officially launched the 2022 licensing round for offshore Block A1. The block was initially granted to BP in 2019, however, has now become available after the company exited the block. As per The Gambian Ministry, BP performed the required work obligations during its time as licensee, including reprocessing 2D and 3D data, conducting geohazard, geology and geophysical studies, and progressed the block so that it is now drill ready.

Philippine National Oil Company Exploration Corporation (PNOC EC) has notified that it is in search of JV partners to pursue the exploration program in Service Contract (SC) 57, where the company holds 100% interest. SC 57 covers an area of 7,120 sq. km in offshore Northwest Palawan in Philippines. PNOC EC has called for submission of interest (LOI) from interested parties for selection of JV operator for the 40% participating interest in SC 57, and JV partner for the 30% participating interest in SC 57. Prospective farm-in suitors have until 17 February to notify their interest while the deadline for bid proposals is 4 April 2022.

The Norwegian Ministry of Petroleum and Energy has approved Aker BP’s plan for development and operation (PDO) for Kobra East & Gekko (KEG) project in the Alvheim area, offshore Norway. Total investments in the project are projected at around NOK8 billion (~$1 billion) and production is scheduled to start in the first quarter of 2024. As per Aker BP, recoverable reserves in KEG are now estimated at around 50 million barrels of oil equivalents. The development comprises the two discoveries Kobra East and Gekko in licence 203. The field will be developed with subsea installations connected to the Alvheim FPSO on the Alvheim field. Aker BP is the licence operator and is partnered by ConocoPhillips and Lundin Energy.

KeyFacts Energy Industry Directory: Esgian