Soumya Mutsuddi, Esgian

This week IOG informed of a planned resumption of drilling at the Southwark field, while semisub West Hercules commenced transit to Canada for an engagement with Equinor. Meanwhile, the Cambo prospect in the UK North Sea was granted a two-year licence extension.

Contracts 

PV Drilling announced a contract award for the jackup PV Drilling II for operations off Indonesia. PV Drilling said that the rig will be provided through a sub-contractor, with operations to be undertaken in Natuna waters, Block A. While the client name has not been disclosed, it is understood to be Harbour Energy, the operator of Block A in Natuna Sea. PV Drilling added that rig will commence operations from beginning of Q3 2022.

Drilling and discoveries

JV partner Enauta informed that no hydrocarbons were discovered at the Cutthroat-1 wildcat in ExxonMobil operated Block SEAL-M-428 in the ultra-deep waters of the Sergipe-Alagoas basin offshore Brazil. Drilling was carried out by the Seadrill-operated ultra-deepwater drillship West Saturn. Following completion of its engagement with ExxonMobil, the rig will commence a charter with Equinor off Brazil towards early Q3 2022, which will keep it working until mid-2026. 

IOG informed that the rock dumping required to provide a stable seabed for the return of the jackup Noble Hans Deul at the Southwark field offshore UK is expected to be completed this week. Consequently, the rig’s return to the Southwark field is targeted for next week with a view to a safe resumption of drilling by mid-April 2022, IOG added. First Gas from Southwark is now expected to be in Q4 2022. IOG further added that given the nature of the seabed scour issue, contractual costs associated with the delay since early January will fall predominantly on the licence holders—IOG and its 50:50 JV partner CalEnergy Resources (UK) Limited.

Aker BP has concluded the drilling of appraisal well 25/2-23 A (Øst Frigg Alfa) and wildcat well 25/2-23 S in the company-operated production licence 873 offshore Norway. The objective of appraisal well 25/2-23 A was to investigate the remaining oil potential in the shut-down Øst Frigg field. The well encountered a 3m oil column in the upper part of the Frigg Formation, in a sandstone layer of about 177m, with good reservoir quality. A 2m oil column was also encountered deeper in the same reservoir. Work is ongoing to evaluate the remaining oil potential throughout the entire Øst Frigg field. The objective of wildcat well 25/2-23 S was to prove petroleum in rocks from the Middle Jurassic Age (the Tarbert Formation), however the well was found to be dry. These are the first and second exploration wells in production licence 873. Drilling was carried out by the 6th gen harsh environment semisub Deepsea Nordkapp. The rig will now drill a pilot well on shallow gas in the AkerBP-operated production licence 028 B in the North Sea.

Demand

Upstream reported that the GB Energy operated Golden Beach gas project offshore Australia is targeting FID by 2023. GB Energy Chief Executive Tim Baldwin is understood to have told Upstream that a  A$32 million (US$24 million) commercial loan from the Australian government will support the drilling of a pilot well. The company is reportedly in the final stages of making a rig commitment and drilling is targeted for the second half of 2022. The FID is expected to be declared after the drilling of the pilot well. Also, there are plans for two development wells to be drilled using a jackup in 2023, with funding of about A$135 million in the final stages of being secured. Golden Beach is a small nearshore discovery in Block Vic/RL1 in the Gippsland basin, with a best estimate contingent resource of 68.5 bcf of gas. The field is expected to produce gas into the south-east Australian domestic market for up to two years, following which it will transition to a natural gas storage facility.

Talos announced that it has received the final Unitization Resolution from Mexico’s Ministry of Energy (SEMER) regarding the development of the Zama field offshore Mexico, and the Resolution affirms Pemex as the operator of the Zama field. Talos will maintain a 17.35% participating interest in the field and anticipates submission of a Unit Development Plan for approval by the working interest partners within 6-12 months, a critical step before the parties can make an FID in 2023. Talos discovered the Zama field in 2017 as the first private sector consortium to enter Mexico following the country’s major energy reforms, and the field was fully appraised by mid-2019. An independent third-party reserves auditor estimated the discovered recoverable resource volumes to be between approximately 735 – 950 million boe.

Shell informed that the UK oil and gas regulator has extended the license for the Cambo prospect in the North Sea by two years. In December 2021, Shell announced its decision to withdraw from the project, and the company has now said that while its position hasn't changed, but "the extension to the licenses will allow time to evaluate all potential future options for the project." Shell owns 30% in the project, while Siccar Point, which operates it, holds the remaining 70%.

ENI announced a major upgrade of the resource base in the Ndunugu field, offshore Angola. Previously the Ndunugu-2 appraisal well was drilled and hit 40m of net oil pay in the Lower Oligocene reservoirs. An intensive data acquisition was performed to assess the full potential of the discovery. Preliminary data collected on Ndungu-2 allows boosting 800-1000 million boe in place the field resources from the initial estimates of 250-300 million boe following Ndungu-1. This makes the Ndunugu field, together with Agogo the largest accumulation discovered in Block 15/06 since the block award. ENI is the operator of Block 15/06 with a 36.84% interest while Sonangol (36.84%) and SSI Fiftenn Ltd. (26.32%) hold the remaining interest.

Orcadian Energy announced receipt of an extension, from the North Sea Transition Authority (NSTA), for Phase ‘A’ of Licence P2320 offshore UK. Phase ‘A’ has now been extended until 14th May 2023 with the initial term date also being extended to 14th November 2024. Orcadian further added that it will need to present to NSTA a fully financed proposal for a well to be drilled to the Tay reservoir, to enable Licence P2320 to proceed into Phase ‘C’, known as the drilling phase.  As per Orcadian, the well could be a Bowhead exploration well, a production/injection well on Feugh, an exploration well on the Carra prospect, or potentially an updip appraisal well on the Pilot channels, which are a contiguous part of the Pilot field not included in the current quoted oil-in-place. In respect of Carra, the Company is now finalising the terms of the previously announced farm-out of a 50% interest in the Carra prospect to Carrick Resources. Orcadian CEO, Steve Brown, said “We are delighted to have received this extension from the North Sea Transition Authority (previously known as the OGA), which brings the date by which we are required to commit to drill a well on P2320 into line with our Pilot project FDP approval plans”.

Byron Energy is in advanced discussions with Enterprise Offshore to secure a jackup for its 2023 campaign. The work scope covers two firm wells starting in January with an option for a third well. The first firm well will be the Golden Trout prospect in South Marsh Island Block 70, while the second well will be either the Dolly Vardon or Steelhead prospects to be drilled from the South Marsh Island Block 58 G platform. The optional well will be decided based on results from the upcoming April 2022 drilling programme and the first well of the 2023 campaign. Byron is on track to commence a previously agreed two-well charter with jackup Enterprise 264 in early to mid-April.  

Mobilisation

Empyrean Energy informed that safety inspection of the COSL-owned semisub Nan Hai Jiu Hao (NH9) has been completed and the rig is cleared and ready for mobilisation to the Jade well location in Block 29/11, offshore China. The company said that high winds and seas have required a re-scheduling of up-anchor, mobilisation and anchoring at the Jade well location to meet safety protocols. The rig is still on location at the CNOOC well, which it was drilling previously. Empyrean also added COSL will provide a new anticipated spud date once sea conditions improve and operations can re-commence, which will be informed through a progress update.

6th gen ultra-deepwater semisub West Hercules has commenced mobilisation from Norway to Canada where it is scheduled to undertake a drilling campaign for Equinor.

Rig Sales

Market reports indicate that two Oro Negro jackups—2013-built KFELS B Class Argent 4 and 2012-built KFELS B Class Argent 5—have been sold to ADES. The jackups have been cold stacked for almost 4-years, so are expected to involve significant upgrades before they are drilling-ready.

Other News

Eco (Atlantic) Oil & Gas announced that it has received final approval from the TSX Venture Exchange for acquisition of Azinam. Accordingly, Eco is now the sole owner of Azinam and will now issue 22,296,300 new Common Shares in Eco to Azinam representing 9.9% of the enlarged share capital. Eco will also issue the second tranche of 17,874,174 common shares subject only to Stock Exchange clearance of the Personal Information Forms of Azinam Holdings' Directors, which is expected to be received this week.

Borr Drilling informed that during the month of March 2022, it issued 1,521,944 new common shares at the NYSE under the At-The-Market program announced on July 6, 2021, at an average price of $3.431 per share. Following such issuance, Borr Drilling has an issued share capital of $15,207,345.20 divided into 152,073,452 common shares with a par value of $0.10 per share.

QatarEnergy has agreed to acquire a 40% working interest in ExxonMobil’s North Marakia exploration block offshore Egypt. ExxonMobil, the operator for the Block, will hold the remaining 60%.

Enauta informed that it has received a nonbinding offer from Karoon Energy Ltd, and has signed an agreement that ensures exclusivity period for due diligence and confidential negotiations for a potential sale of 50% of its interest, without operation, in Block BS-4 offshore Brazil containing the Atlanta field. Enauta added that the exclusivity agreement is valid until May 31st, 2022, and the parties have discretion to proceed or not with the transaction. Located in the Santos Basin, the Atlanta Field is 100% owned and operated by Enauta. 

Following the split of the company with the spin-off of Odfjell Technology, Odfjell Drilling announced appointment of Kjetil Gjersdal as its new CEO. Gjersdal has been with the company for 22 years and has held various positions in the past within operations, such as Rig Manager, VP MODU Operations, SVP MODU International, and EVP MODU, before becoming CEO.

Ithaca Energy informed that an agreement to acquire 13.3% additional equity interest in the company-operated Alba field from Mitsui E&P UK Limited was completed on 30th November 2021, increasing Ithaca’s interest in the field to 36.7%. Ithaca also informed that a further agreement was signed on 28th February to acquire 100% of the share capital of Summit Exploration and Production Limited. The agreement has an economic date of 1st January 2021 and is subject to normal completion activities including consent from the North Sea Transition Authority. 

KeyFacts Energy Industry Directory: Esgian