Soumya Mutsuddi, Esgian

This week Transocean announced several new awards and extensions, and Saipem 12000 successfully completes drilling the Baleine East 1X well. Meanwhile, ExxonMobil and partners' success offshore Guyana continues.

Contracts

Transocean reported new awards and extensions in its latest fleet status report, adding new backlog in US GOM, Brazil, West Africa, the North Sea, and India. Drillship Deepwater Skyros secured a ten-well contract in Angola with TotalEnergies at a dayrate of $310,000 and is now contracted until May 2024. In the US Gulf of Mexico, Deepwater Invictus was awarded a two-well contract extension at a dayrate of $375,000, which extends the drillship's current contract with Woodside to February 2023. In Brazil, drillship Deepwater Mykonos was awarded a 435-day contract, along with options of up to 279 days, by Petrobras for a dayrate of $364,000. In Norway, semisub Transocean Spitsbergen was awarded a nine-well contract at $335,000 per day, along with two one-well options at $375,000 per day by Equinor. Equinor also exercised two one-well options at a dayrate of $305,000 on the rig. Semisub Paul B. Loyd. Jr. was awarded a one-well contract by Serica Energy off UK along with two one-well options. The rig was also awarded an eight well P&A option for work in the UK. In India, drillship Dhirubhai Deepwater KG1 was awarded 86-day contract extension along with up to four option wells (approximately 270 days) for a dayrate of $364,000. The aggregate incremental backlog associated with these fixtures is approximately $650 million. As of 25th July, Transocean's total backlog was approximately $6.2 billion. 

Drilling and discoveries

JV partner Okea informed that that no hydrocarbons were found in the Wintershall-operated Brage South exploration well (31/4-A-13 C), in licence PL055 off Norway. The well will be plugged as a dry well. Drilling was understood to have been carried out by harsh-environment semisub Scarabeo 8. 

Neptune Energy announced completion of the drilling of four development wells on its operated Fenja field off Norway. Start-up of the Fenja field is scheduled for Q1 2023, with the field expected to produce approximately 28,000 barrels of oil equivalent per day (boepd) at plateau. The four wells drilled comprise of two oil producers, one water injector and a gas injector. Drilling was carried out by the harsh-environment semisub Deepsea Yantai. 

Okea received regulatory approval for use of harsh-environment semisub COSLPromoter for production drilling, completion, and temporary P&A of well 6407/9-H-1 H in the Draugen field (production licence 093) off Norway. The rig's next engagement is scheduled with Equinor, expected to commence during Q2 2023.

Ultra-deepwater drillship Maersk Voyager has completed drilling of exploration well Jaca-1, offshore Sao Tome & Principe. The block 6 consortium is currently analyzing the data and no results have been announced yet. Maersk Voyager is currently on a 1-year contract with Shell.

ExxonMobil and partners have made two new discoveries at the exploration wells Seabob-1 and Kiru-Kiru-1 on the Stabroek Block offshore Guyana, adding to the gross discovered recoverable resource estimate of 11 billion boe. The Seabob-1 well was drilled by the ultra-deepwater drillship Stena Carron and encountered 131ft (40m) of high quality oil bearing sandstone reservoirs. The second well, Kiru-Kiru-1, was drilled by the ultradeepwater drillship Stena DrillMAX and encountered 98ft (30m) of high quality hydrocarbon bearing sandstone reservoirs.

Eni has confirmed that drillship Saipem 12000 has successfully drilled the Baleine East 1X well in Block CI-802 offshore Cote d’Ivoire.The well has resulted in a 25% increase in the volumes of hydrocarbons at the Baleine field to a current estimate of 2.5 billion barrels of oil and 3.3 tcf of associated gas. Baleine East 1X is located about 5 km east of the Baleine 1X discovery well in the adjacent block CI-101 and represents the first commercial discovery in the CI-802 block, confirming the extension of the Baleine Field. The activities in the Baleine Field will continue with the drilling of a third well which will ensure, together with the other two already drilled, the accelerated start-up of production, confirming first oil in the first half of 2023.

Demand

CGX Energy completed a farm-in agreement with Frontera Energy which enables CGX to secure funding for the Wei-1 exploration well in the Corentyne block off Guyana. As part of the agreement, CGX will transfer 29.73% of its participating interest in the Corentyne block to Frontera in exchange for Frontera funding the JV's costs associated with the Wei-1 exploration well for up to $130 million and up to an additional $29 million of Kawa-1 exploration well, Wei-1 pre-drill, and other costs. In addition, CGX shall assign an additional 4.94% of its participating interest in the Corentyne block to Frontera as consideration for repayment of the outstanding principal loan amounts received from Frontera. The JV partners informed that final preparations are underway in advance of spudding the Wei-1 well in October 2022, subject to rig release. Further, the necessary long lead materials have been secured and are being mobilised.  Drilling will be carried out by the ultra-deepwater semisub Maersk Discoverer, which is currently drilling for Shell off Trinidad and Tobago.

JV partner Carnarvon Energy outlined focus areas for potential future exploration programs in the Bedout Basin off Australia. Carnarvon is a partner in the Santos-operated exploration blocks WA-435, 6, 7 and 8-P in the Bedout Basin. As per Carnarvon, future exploration drilling will be focused on (1) the Pavo South exploration well / Pavo appraisal in Block WA-438-P; (2) Dorado near field exploration drilling including appraisal of Baxter down-dip potential; (3) Pavo on-trend oil plays into area currently being evaluated with most recent 3D seismic processing; (4) material "game changer" standalone oil prospects in the north of the area; and (5) gas-prone prospects to the west of the area to support the phase two gas development at Dorado and Roc.

JV partners Shell and Deltic Energy made a positive well investment decision to drill the Selene gas prospect on Shell-operated Licence P2347 off the UK. While the timing of a well slot has yet to be confirmed and will be subject to drilling schedules, the same is expected to be firmed up as the JV progresses its well planning, Deltic informed. Under terms of the farm-out agreement with Shell, Deltic holds a 50% working interest in the licence and will be carried for 75% of the costs of drilling and testing the well on the Selene prospect, up to $25 million and, as a result of the well investment decision.

JV partners for the Nandino prospect in Service Contract 54 (SC54) off Palawan, Philippines, advised the Philippines Department of Energy of their intent to drill the Nandino 1 exploration well in the year commencing August 8, 2022. The partners in SC54 are Nido Petroleum Philippines Pty Ltd and Yilgarn Petroleum Philippines Pty Ltd (Nido and Yilgarn are 100% owned subsidiaries of Sacgasco Ltd), and TG World (BVI) Corporation, a wholly owned subsidiary of Blue Sky Resources. TG World had agreed to a farmout with Nido and Yilgarn to fund 85% of the drilling costs of Nandino 1 well. Following the farm-in agreement, Nido and Yilgarn own a combined 51.25% operated interest in SC54, while TG World owns 48.75%. TG World has secured the DP2 drillship Valentin Sashin (aka Deep Venture) to drill the well. The rig is owned by Blue Sky’s Indonesian subsidiary PT Angkasa Biru Servis Indonesia, and is currently undergoing preparations for drilling. Drilling of Nandino 1 is expected to commence soon after receipt of requisite regulatory and corporate certifications and acceptances. The rig is understood to be currently stacked off Vietnam and has not worked since 2017. The Nandino Prospect is targeting 27 million barrels of recoverable oil from 91 million barrels of oil in place (mean, unrisked prospective resource). 

Mobilisation / Upgrades

Harsh environment jackup Maersk Invincible has been undergoing the 5-yearly recertification of its drilling and well control equipment, along with upgrades involving SCR & Hybrid systems. The activity is expected to complete in early September, following which the rig will return to the Ivar Aasen field off Norway to continue its engagement with AkerBP.

Other News

Shell took a final investment decision to develop the Jackdaw gas field in the UK North Sea, following regulatory approval earlier this year.  The project is expected to come online in the mid-2020s and is part of Shell’s broader intent to invest £20 to £25 billion in the UK energy system in the next decade, subject to Board approval and stable fiscal policy. Jackdaw will be developed through a tie-back to Shell’s existing Shearwater gas hub in the North Sea. Peak production from the field is estimated at 40,000 barrels of oil equivalent per day.

Borr Drilling announced that it obtained a financing proposal for the remaining $100 million of the $250 million senior secured facilities that was still subject to final syndication as indicated in the company’s announcement dated 14th July 2022. As such, Borr reached agreements in principle with all the secured creditors so as to extend all secured debt to 2025. Borr added that these agreements in principle are subject to the respective boards’ and credit committees’ approvals and binding documentation. Borr anticipates that the need for additional liquidity in connection with the closing of the agreements in principle referenced above can be reduced from the $250 million communicated previously to approximately $150 million. Further, Borr will continue to seek solutions which could help optimize its current capital structure and reduce the need for liquidity, which could be through further asset sales, JV structures as well as additional asset financing.

Jadestone Energy has executed a sale and purchase agreement with BP Developments Australia Pty Ltd to acquire a non-operated 16.67% interest in the North West Shelf Oil Project offshore Western Australia for a total initial cash consideration of USD 20 million. The development is made up of the Cossack, Wanaea, Lambert and Hermes oil fields. Altogether, the project comprises 13 subsea wells producing through the Ohka FPSO. The Okha FPSO was installed at the fields in 2011 and has 60,000 bbls/d of oil processing capacity, along with water handling and gas processing/reinjection facilities. The transaction has an economic effective date of 1 January 2020. Jadestone will make further payments to the decommissioning trust fund via two equal instalments of USD 20.5 million payable on or about 31 December 2022 and 31 December 2023.

KeyFacts Energy Industry Directory: Esgian