Ithaca Energy expects results from sidetrack appraisal drilling at its K2 prospect in the UK North Sea during September 2023. The K2 prospect is located in License P2382 in Block 22/14c. Ithaca holds a 50% working interest in this licence with the remaining 50% working interest held by Dana Petroleum. The joint venture decided to drill the K2 prospect in January and hired Stena Drilling’s 5,000-ft semisub, Stena Spey, in February 2023. The rig left Scapa Flow to begin drilling operations in the North Sea in early June. On 26 July 2023, Ithaca announced successful exploration drilling at the K2 prospect together with the decision to proceed with follow on appraisal drilling. Results from the appraisal sidetrack are expected during September and will provide further data to determine a recoverable resource estimate and future development activity. The K2 prospect is part of the company’s strategy targeting opportunities close to existing infrastructure to maximise value.
Neptune Energy has started drilling operations at its operated Yakoot exploration well, located in the North West El Amal Concession in the southern Gulf of Suez, Egypt. It is the first operated well to be drilled by Neptune in Egypt. The North West El Amal offshore concession covers 365 km2 and is located approximately 42 kilometres south-east of Ras Gharib and 105 kilometres north-west of Hurghada. Neptune was awarded the exploration licence for the concession in February 2019 and acquired advanced 3D seismic data in 2020. The operation is being carried out with the 300-ft Admarine VIII rig, operated by ADES, and has a final target depth of around 3,600 metres. Neptune Energy’s Managing Director in Egypt, Alexandra Thomas, said this is a strategically important well.
The Wintershall Dea-operated Kan discovery off Mexico is expected to be appraised next year. The appraisal plan is anticipated to be submitted to the regulator in Q3 2023. Borr Drilling 400-ft jackup Ran drilled the discovery well, which encountered over 170 m (558 ft) of net pay sands. Ran is currently working with Fieldwood Energy off Mexico. The 400 ft IC rig has additional campaigns scheduled with TotalEnergies and Wintershall, with Wintershall scheduled to pick up the rig again around May 2024.
Norway’s Petroleum Safety Authority (PSA) has given Equinor consent for exploration drilling in two blocks located in the North Sea off Norway. In block 15/6, production licences 029 C and 048, Equinor plans to drill well 15/6-B-20, targeting the Dougal prospect. The well will be drilled with the Noble Lloyd Noble jackup in water depths of 116 meters. The 500-ft Noble Lloyd Noble rig, to be renamed Shelf Drilling Barsk, is currently under contract with Equinor, which is expected to end by October 2023. After that, the unit is available until its next contract with Equinor, expected to start around May 2024. In block 30/4, located in production licence 043 FS, the state-owned operator plans to drill well 30/4-4, targeting the Sara prospect. This well will be drilled using the Transocean Spitsbergen semisub in water depths of 128,6 meters. The 10,000-ft Transocean Spitsbergen is firm with Equinor until March 2025 with a fixed price option into June 2025.
The Norwegian Petroleum Directorate (NPD) has granted Neptune Energy Norge a drilling permit for an appraisal well offshore Norway. The well 35/6-4 S is located in production licence 929 in the North Sea. The licence is operated by Neptune with Pandion Energy, Wintershall Dea, Aker BP, and DNO Norge participating as partners. The water depth at the site is 332m. The well will be drilled with the Odfjell Drilling-managed 3,900-ft semisub Deepsea Yantai. Neptune has already secured safety consent for this well from the Norwegian authorities. The rig is currently working for DNO on the Norma well, also in the North Sea, after which it is expected to move on to the Neptune well. The semisub was also used to drill the Ofelia prospect last year and the well was announced as an oil discovery in August 2022.
Shell is planning to drill an appraisal well on its Pensacola discovery located in Licence P2252 in the UK Southern North Sea in Q4 2024. The Licence P2252 is operated by Shell with Deltic Energy participating as a partner. The Pensacola exploration well 41/05a-2 was spud on 21 November 2022 using the 350-ft Noble Resilient jackup rig. In February 2023, the discovery was described as one of the largest natural gas discoveries in the Southern North Sea in over a decade with an estimate of approximately 300 Bcf. Following post-well analysis, the partnership confirmed in July that the Pensacola structure was estimated to contain gross P50 initially in place volumes of gas and oil of 342 million barrels of oil equivalent. This analysis indicated Pensacola may contain almost double the volume of recoverable gas and oil than originally thought, with Deltic estimating total gross P50 Estimated Ultimate Recovery (EUR) of c.99 mmboe, up from 50 mmboe immediately after well completion. The JV will now move forward its appraisal and development plans while assessing development concepts and is working towards an appraisal well being drilled in Q4 2024. Shell is also planning to drill the Selene exploration well in the North Sea with site survey works already underway. Depending on the exact timing of the Pensacola appraisal well, Selene and Pensacola may have the added benefit of forming part of the same drilling programme.
Market sources indicate Petrobras is asking the remaining bidders in the tender for one jackup to work off Brazil to confirm their intentions. This reportedly follows some of the rigs that were offered either being disqualified or pulled from the tender process. The tender is for one independent leg jackup with a cantilever capable of working in 12-50 m (39-164 ft) water. The term is 1,460 days with an option for 150 days. Mobilisation must be within 210 days of contract signing.
Cairn Oil & Gas is seeking global expressions of interest (EOIs) for the supply of a shallow water jackup rig for the East and West coasts of India. Cairn Oil & Gas is part of Vedanta Resources Limited, which plans to invest $20 billion over the next four to five years in the expansion of brownfield capacity and setting up green field capacity for oil & gas, renewable energy, display glass, semiconductor, mining and smelting. The project will have an estimated duration of a minimum of 1 year, and up to 5 years. It will be considered for the award based on commercial terms and rig suitability. The expected start window is set for Q2/Q3 2024. The minimum technical requirements include a water depth of 10-80m, 1500HP power, 10K psi BOP, and 5,000 psi working pressure. Cairn has mentioned this EOI is in addition to the EOI published in May 2023. Market sources indicates the expected starting date for the May EOI has been changed to April 2024. Responses to the latest request for EOIs are due by 13 September 2023.
Diamond Offshore 6,000-ftsemisubmersible Ocean Apex has returned to Australian waters and commenced a two-well campaign for Woodside, following yard time in Singapore. The unit was previously working for Woodside offshore Australia from late 2022 through the first quarter of 2023 then underwent its five-year special periodic survey at the Seatrium yard in Singapore in recent months. Ocean Apex is currently contracted to Woodside into October 2023, then has work lined up offshore Australia with Inpex, Santos, and Chevron that will keep the rig committed into late in the first quarter of 2025. Available options with Santos and Chevron could potentially keep the rig working into the third quarter of 2025 if exercised.
Well-Safe Solutions’ 400-ft jackup, Well-Safe Protector, has completed a contract with Ithaca Energy and is now mobilising for Neptune Energy. The Well-Safe Protector, formerly West Epsilon, started its contract with Ithaca in the UK North Sea in December 2022, two years after being bought and upgraded to meet the challenges of well plug and abandonment. The rig was in charge of plugging and abandoning wells on the Anglia platform in the Southern North Sea. Following the completion of these operations, the rig started moving away from the Anglia field location on Monday in preparation for a contract with Neptune Energy. The one-year firm contract with Neptune starts immediately and it includes the P&A of at least 4 subsea and 21 platform wells in the Dutch and UK sectors of the North Sea. Neptune also has eight three-month options for work thereafter, which could keep the rig busy into Q3 2026. Meanwhile, Well-Safe’s 1,500-ft semisub rig Well-Safe Guardian is currently moored in the Firth of Forth where it’s concluding the commissioning of the saturation dive spread before resuming a contract with Repsol Sinopec, which is expected soon.
Following the completion of reactivation, Deep Value Driller AS has informed that its 12,000-ft drillship Deep Value Driller has left Westcon Yard in Norway in preparation for its voyage to West Africa. The Deep Value Driller had been undergoing reactivation at the Westcon Yard in Ølensvåg. Sea trials, equipment and system testing were conducted in July ahead of the rig’s bareboat charter to Saipem and work with Eni. The rig owner said in August that the previously forecasted reactivation cost was $43.6 million, but due to cost inflation and unforeseen additional costs the total project cost increased to $55 million. The company experienced an unforeseen and temporary relocation of the drillship, which added approximately $4 million in costs. The drillship left Westcon Yard on Monday 21 August 2023 as it’s preparing for the voyage to West Africa. With this, the drillship is starting its three-year bareboat charter with Saipem, under which it will work for Eni offshore Cote D’Ivoire.
Following a maintenance period in Scotland, the 225-ft jackup Valaris 72 is moving out of a port and to the North Sea to continue working for Eni. The rig arrived for the maintenance period in Dundee in early June 2023. The maintenance has now been completed and, on Wednesday 23 August, the jackup headed out of the port, towed by the AHTS vessel Magne Viking. It will now continue its P&A contract with Eni in the UK North Sea until the end of 2024.
Three companies have been offered exploration licences for CO2 storage in one area in the North Sea. The companies are Sval Energi, Storegga Norway, and Neptune Energy Norway. The authorities have reviewed applications from five companies following announcement of one suitable acreage in January 2023. Sval, Storegga, and Neptune applied for the licence in February. This is the fifth time acreage is being awarded for CO2 storage under the CO2 Storage Regulations in Norway. The permit is offered with a binding work program with milestones that ensure fast and efficient progress, or the return of the areas if the licensees do not carry out the project.
Shell and its partner Deltic Energy have started site survey works associated with the Selene exploration well location in the UK North Sea. The Selene prospect is situated in the Southern North Sea Licence P2347, which is operated by Shell with Deltic Energy participating as a partner. These operations come following a positive well decision by the two partners in July 2022. In April 2023, the timing of the well was set for the summer of 2024. Selene is estimated to contain gross P50 prospective resources of 318 Bcf of gas with a geological chance of success of 70%. A geophysical site survey vessel has been mobilised to acquire high resolution 2D seismic lines over the proposed well location. The seismic acquisition is expected to be completed before the end of August. The data acquired will then be used to inform the geotechnical survey, which will further assist in determining the exact location and placement of the rig.
ElDorado Drilling AS has raised $130 million in a private placement, with net proceeds to be used to finance the acquisition and completion of the company’s two newbuild drillships, as well as for working capital and general corporate purposes. SpareBank 1 Markets and Fearnley Securities acted as joint lead bookrunners in the transaction. ElDorado Drilling previously raised $70 million in a private placement to fund its rig acquisitions. ElDorado Drilling acquired ultra-deepwater newbuild drillships, the 12,000-ft West Dorado and the 10,000-ft Pacific Zonda, now referred to as Dorado and Zonda by the banks involved, from shipyard Samsung Heavy Industries earlier this year. The Samsung 12000 design, 7th generation drillships are scheduled for delivery in 2024. Sparebank noted that ElDorado “plans to put the rigs to work via a lean management setup.” Zonda was named as one of the winning bids in a recent Petrobras pool tender. SpareBank 1 and Fearnley both said that ElDorado is also considering applying part of the net proceeds of the most recent private placement towards a payment for the acquisition of a third drilling rig.
TotalEnergies has signed an agreement with CapeOmega Carbon Storage, a subsidiary of CapeOmega, to acquire a 40% participating interest held by CapeOmega in the CO2 storage exploration licence ExL004 (the Luna project). Located 120 km offshore Bergen in 200 m water depth, ExL004 covers an area of 453 sq km. It is adjacent to the licence where the Northern Lights CO2 storage project (TotalEnergies 33%) is under development, with a first phase due to start in 2024. ExL004 is operated by Wintershall DEA Norge with a 60% participating interest. The transaction is subject to satisfaction of customary conditions, including final approvals from relevant government authorities.
Odfjell Drilling reported an increase in its quarterly operating revenue driven by increased activity of some rigs. The rig owner also updated its dividend policy with the first distribution planned for September 2023. Operating revenue for Q2 2023 was $184 million compared to $163 million in Q2 2022, an increase of $21 million due to increased activity in the External Fleet segment. However, the company’s net profit from continuing operations halved in Q2 2023 totaling $11 million compared to $22 million in the same period last year. Following the completion of the company’s planned refinancing, the board has updated its dividend policy to implement a new quarterly dividend programme and has elected to declare a dividend for the period of $14.2 million, corresponding to $0.06 per share. The first distribution will be made in September 2023. Odfjell Drilling says that it continues to see an increase in dayrates for its units and supply side remains tight, with no newbuild or stacked capacity likely to impact it in the near term. Additional units leaving the Norwegian continental shelf are further restricting supply for Tier 1 semisubmersible units, particularly in 2024 and 2025. Odfjell doesn’t expect to see many of these units return to Norway in the short to medium term. Demand overseas has continued in locations such as West Africa, Canada, Australia, and Brazil as evidenced by recent contracts.
ExxonMobil has submitted its development plan for the Whiptail project off Guyana as part of the environmental impact assessment for the project. The plan proposes 33-72 wells, including production and water/gas injection wells, from up to 10 drill centres. Drilling could tentatively start in late 2024 or early 2025 and could run through mid-2030 to late 2031. First production is estimated in 2027. The Whiptail, Pinktail, and Tilapia fields will be developed jointly as the Whiptail project. Water depths range from about 1,500-2,200 m (4,921-7,218 ft). ExxonMobil confirmed it has not yet made a final investment decision on Whiptail and is continuing to evaluate cost considerations. For the purposes of the environmental authorisation process, the estimated project development cost is GYD 2.690 trillion (USD 12.933 billion).
The US Bureau of Ocean Energy Management (BOEM) has published the Final Notice of Sale and Record of Decision for Gulf of Mexico Lease Sale 261, which will be held on 27 September 2023. Approximately 12,395 blocks spanning about 67 million acres will be available. The Final Supplemental Environmental Impact Statement was published in January.
Image credit: Neptune Energy
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