Esgian Rig Analytics Market Roundup (Week 6)

In case you missed it, you can access our previous Rig Market Roundup here.

Esgian Rig Analytics Story

COSL Drilling’s 4,921-ft semisub COSLProspector has reached the Norwegian coast following a nearly four-month-long journey from China, thereby increasing the North Sea region’s rig count by one unit at a time when it’s experiencing a reduced semisub supply. Read more here.

Contracts 

Shell, the operator of Licences P2437 and P2252 in the UK North Sea, has signed a rig contract with Valaris for the drilling of both the Selene exploration well and the Pensacola appraisal well. The two wells will be drilled using the 400-ft Valaris 123 heavy-duty jackup rig, with Selene and Pensacola being drilled as a two-well sequence. The contract and mobilisation are starting in the June-July 2024 period. A positive well investment decision for the Pensacola appraisal well was made in December 2023. With Selene and Pensacola being drilled sequentially, this creates the potential for operational efficiencies associated with being part of an extended programme of wells. The geophysical site survey on Pensacola has now received permitting approval. Mobilisation to the site has taken place and the survey is expected to last for approximately one month. A recent technical and commercial review of Pensacola has illustrated the commercial potential of the discovery based on two potential development scenarios –  a gas and oil (or “combined”) development and a gas only development. The Valaris 123 rig has been in Dundee since November 2023 following the completion of a contract in the Dutch North Sea. In addition to this latest scope, the unit already has two other jobs lined up for 2024. The first one is a one-well contract with Ithaca in the UK North Sea, which is expected to begin in April 2024. Then, after the Shell contract, it is expected to work on a CCS contract with TAQA in the Dutch North Sea in Q4 2024.

TotalEnergies and drilling contractor Vantage Drilling have signed a binding agreement to create a new joint venture that will acquire the 12,000-ft drillship Tungsten Explorer from Vantage Drilling. TotalEnergies will pay $199 million for a 75% interest in the joint venture, with Vantage owning the remaining 25%. The joint venture will contract Vantage to operate the rig for 10 years. The 2013-built, DSME 12000 design rig has been working for TotalEnergies offshore Namibia since early 2022 and is currently drilling the Magnetti-1X well. TotalEnergies exercised an option for the rig in September of last year that keeps it working into mid-2024. Tungsten Explorer has previously worked for the supermajor in Cyprus and the Congo. The company stated that the rig meets its “envisaged future global needs” TotalEnergies Chairman and CEO Patrick Pouyanné stated the joint venture partnership would allow the company to hedge its deepwater offshore drilling costs. Vantage CEO Ihab Toma noted that the proceeds from the sale of the rig “will completely deleverage our balance sheet” while also putting a long-term revenue stream in place. Tungsten Explorer has a maximum drilling depth of 40,000 ft, hookload capacity of 2.5 million pounds and is equipped for managed pressure drilling.

TotalEnergies and Vantage Drilling have revealed more details about their new agreement, which will see the two companies enter into a joint venture with ownership of 12,000-ft drillship Tungsten Explorer. Tungsten Explorer is currently owned by Vantage Drilling. As announced on 6 February, TotalEnergies will pay $198.75 million in cash for a 75% interest in the joint venture. Vantage stated that its ownership stake of 25% is at $66.25 million, putting the total vessel sale consideration at $265 million. Esgian values the rig at $333 to $368 million and see the sale at $265 million as strategic, as it is likely linked to the contract commitment with TotalEnergies linked to the sale. Conditions precedent for the deal include due diligence on the rig and the formation of the joint venture. The rig will also end its current contract with TotalEnergies offshore Namibia before it is moved to the joint venture. In an updated fleet status report, Vantage indicated that options have been exercised and the rig is now firmly contracted to TotalEnergies into the second quarter of 2025. Vantage stated that the joint venture intends to enter into an umbrella rig contract with TotalEnergies, initially for a period of 10 years with an option period of up to five years. Vantage will be engaged as rig manager to oversee the operation of Tungsten Explorer for the same term. As part of these agreements, the joint venture will compensate Vantage with daily management fees of approximately $47,500 during rig operation and reduced fees based on the nature of non-operating periods. Under the structure of the agreement, Vantage as an operating company will have a drilling services contract with TotalEnergies affiliates or potentially other oil and gas companies with a variable rate charter paid by Vantage to the joint venture and then the management fee paid by the joint venture to Vantage. Speaking at TotalEnergies’ fourth quarter and full-year 2023 results presentation, TotalEnergies CEO Patrick Pouyanné said that the joint venture was a way of hedging drilling costs for the company, which they see as going up. Pouyanné called paying dayrates of around $500,000 as the company did in 2010 to 2015 as a “mistake” and that paying around $200 million in advance for a 10-year contract is “nothing” when compared to the size and scale of TotalEnergies’ operations. When asked if TotalEnergies may buy into other rigs, the CEO said the company would look at other opportunities. Pouyanné noted that Vantage’s “financial stress” had allowed “good discussions” for the joint venture agreement.

Diamond Offshore Drilling has secured contracts for two of its floating rigs, one in the Gulf of Mexico and the other in the North Sea. Diamond has executed a two-year contract extension with a subsidiary of bp in the US Gulf of Mexico for the 12,000-ft drillship Ocean BlackLion, starting in September 2024 in direct continuation of the rig’s current contract. This contract extension represents approximately $350 million of additional backlog. The rig is currently working for bp under a two-year option, which started in September 2022. Additionally, the company has entered into a drilling contract with Serica Energy to use the 3,000-ft semisub Ocean Patriot for two plug and abandonment (P&A) wells in the UK North Sea. The program is estimated to start in March 2024 and to continue for approximately 60 days. The contract represents over $10 million of additional backlog, excluding mobilisation. The Ocean Patriot has recently completed a contract with Repsol in the UK North Sea and demobilised to Invergordon. The rig has a long-term contract with TAQA starting in 2025 and is targeting the North Sea spot market to fill out the remaining availability for this year.

ADES has received notifications of extension for three of its jackup rigs operating offshore Egypt. ADES received the notification of a two-year extension for the 250-ft Admarine III and Admarine VI contracts, as well as a one-year extension for the 250-ft Admarine V contract. The three rigs are contracted by the General Petroleum Co. (GPC). ADES expects the extensions to be executed in the coming weeks following the Egyptian General Petroleum Corporation (EGPC) approval. These extensions represent c.SAR 450 million (c.$120 million) of additional backlog.

Drilling Activity and Discoveries

Following its recent agreement for the use of Transocean’s 10,000-ft semisub Transocean Barents, OMV Petrom is continuing preparations to spud the first well in its Neptun Deep project in the Romanian waters of the Black Sea in 2025. OMV Petrom took its final investment decision on the deepwater natural gas project Neptun Deep in June 2023 and in December 2023 contracted Transocean Barents for a minimum period of a year and a half to drill the 10 wells as part of this project. The rig, currently finishing up drilling operations for Eni offshore Cyprus, is expected to mobilise to the Black Sea in late 2024. OMV Petrom stated that around 4.7 billion RON of its 2024 organic CAPEX would go towards E&P, with around half of this to be spent on Neptun Deep. In addition to the contract for Transocean Barents, OMV Petrom has also signed agreements with Saipem for offshore facilities and Halliburton for integrated drilling services related to the project. The company stated that over 80% of the execution agreements to the project have been awarded and that it is focusing on finalising the awarding of the main contracts, permitting activities, the start of construction and preparations to spud the first well in 2025.

Speaking at the company’s Q4 2023 results presentation, Shell CEO Wael Sawan stated that there is “no question around the volume of the resource” offshore Namibia and that the company planned to drill “a couple” of wells offshore Namibia in the coming months as it searches for “the sweet spots” within the resource to create opportunities for development. Shell has been drilling exploration and appraisal wells in the Orange Basin offshore Namibia with Odfjell Drilling-managed semisubmersible Deepsea Bollsta since late 2022, making discoveries at the Graff, La Rona, Jonker and Lesedi wells. The rig is currently expected to be released in mid-2024 after Shell declined to exercise a six-month option. Sawan said that Shell wants to “derisk the opportunity” offshore Namibia and that it helps that there are other drilling activities which will provide more data points about the prospectivity of the basin. TotalEnergies and Galp have also been carrying out drilling campaigns in the Orange Basin. Galp recently reported a discovery at its Mopane-1X well while TotalEnergies has been carrying out an appraisal drilling campaign following up its Venus discovery in 2022.

The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) has issued Significant Discovery Licence 1060 to Equinor Canada Ltd., following on from Equinor’s Cambriol G-92 discovery in 2020. The C-NLOPB stated that recoverable oil volume from this discovery is estimated to be 340 million barrels. Equinor holds a 60% operated interest in the license, while BP has a 40% interest. In October 2020, Equinor announced that the two partners had encountered hydrocarbons in wells at the Cappahayden and Cambriol prospects in the Flemish Pass Basin offshore Newfoundland. These wells were drilled with Transocean 10,000-ft semisub Transocean Barents. In February 2023, the C-NLOPB issued Significant Discovery Licence 1059 to Equinor in relation to the Cappahayden K-67 discovery, with an estimated recoverable oil volume from this discovery at 385 million barrels.

The Norwegian Offshore Directorate (NOD) has granted Neptune Energy Norge a drilling permit for a wildcat well in the North Sea offshore Norway. The well 36/7-5 S is located in production licence 636, which is operated by Neptune in partnership with INPEX Idemitsu Norge, PGNiG Upstream Norway, and Sval Energi. Neptune’s Norwegian business was recently acquired by Vår Energi, which is majority-owned by Italy’s Eni. The Italian company acquired the rest of Neptune’s portfolio other than Germany, which was carved out of the transaction. The well, targeting the Cerisa prospect, will be drilled using the Odfjell Drilling-managed 3,900-ft semisub, Deepsea Yantai. Neptune secured consent from the Norwegian authorities to drill the well with the Deepsea Yantai back in 2023. The well was initially planned for late 2023 but was delayed in November to 2024. The rig is currently working for Vår Energi at the Ringhorne North location.

TotalEnergies has begun production from the Akpo West field on the PML2 license offshore Nigeria. Akpo West is tied back to the existing Akpo FPSO. TotalEnergies stated that Akpo West is to reach 14,000 b/d of condensate production by mid-2024, to be followed by up to 4 million cubic meters/d of gas per day by 2028. TotalEnergies has been drilling offshore Nigeria with Noble 10,000-ft drillship Noble Gerry de Souza since early 2023 and began drilling the first of three wells at Akpo West in November 2023. Market sources have indicated that TotalEnergies has exercised options for the rig which would keep it working offshore Nigeria through 2024. TotalEnergies is the operator of PML2 with a 24% interest. Partners include CNOOC with 45%, Sapetro with 15%, Prime 130 with 16% and the Nigerian National Petroleum Company Ltd as the concessionaire.

Chinese oil firm CNOOC has started production at the Suizhong 36-1/Luda 5-2 Oilfield Secondary Adjustment and Development Project in Liaodong Bay of the Bohai Sea. The main production facilities include two new central processing platforms and two new wellhead platforms. For this shore-powered project, which has an average water depth of approximately 30 metres, CNOOC is planning to drill 118 development wells, including 81 production wells and 37 water-injection wells. The project is expected to achieve a peak production of approximately 30,300 barrels of crude oil per day in 2025.

TotalEnergies confirmed that the Mangetti-1X exploration well in the Orange Basin offshore Namibia had encountered hydrocarbons, though CEO Patrick Pouyanné said the find was “not huge.” The supermajor is carrying out a two-rig drilling program offshore Namibia, drilling exploration and appraisal wells as it follows up its 2022 Venus discovery on Block 2913B. Currently, Vantage drillship Tungsten Explorer is drilling Mangetti-1X while Odfjell Drilling-managed 10,000-ft semisubmersible Deepsea Mira is drilling the Venus 2-A appraisal well. TotalEnergies executives stated that another exploration well, Kokerboom, will be drilled south of the Venus discovery in the coming months.

Norwegian operator Aker BP’s current plans entail drilling 10 to 15 exploration wells per year, with a target of net 250 mmboe from 2022 to 2027. Out of these 10-15 wells, 80% are expected to be near field and the remaining 20% in new areas. In addition to the one which is currently in progress, Aker BP plans to drill nine more wells as the operator this year. Two more non-operated wells are in progress and four more are planned for 2024. Half of these wells are scheduled for the second quarter of the year. The company’s financial plan for 2024 includes exploration spend of ~$500 million. The operator currently has three rigs under contract in Norway, the 6,560-ft semisub Deepsea Nordkapp and the 10,000-ft Scarabeo 8 and the 492-ft jackup Noble Invincible. Two more rigs are scheduled for future work, the 492-ft jackup Noble Integrator later in 2024 and the 10,000-ft semisub Deepsea Stavanger in 2025. The Noble Integrator started a one-well contract with Harbour, drilling the Amethyst well, in January 2024. After this, it is scheduled to work for Aker BP. In addition to exploration drilling operations, Aker BP will also be using these rigs on a large portfolio of projects which are currently in development. One of these is scheduled to come online in 2024, another in 2025, two in 2026, and the rest in 2027.

Demand

TotalEnergies has FEED in progress for the Sapakara South and Krabdagu oil hub development offshore Suriname and is targeting a final investment decision by the end of 2024. A 200,000 b/d development is under study, with first oil expected in 2028. The company began the competitive call for tenders for the project in fourth quarter 2024, with floating rigs being considered for planned drilling activity. The Sapakara South and Krabdagu finds are located on Block 58 offshore Suriname, where TotalEnergies is the operator with a 50% working interest. APA Corporation holds the remaining 50% interest.

Norwegian operator OKEA has confirmed that its final investment decision (FID) for the Brasse project in the North Sea off Norway is coming soon. OKEA took over the operatorship of the project, located in production licence 740, in August 2023. OKEA then entered into a sale and purchase agreement (SPA) with M Vest Energy to divest 4.4424% WI and with Lime Petroleum to divest 6.2792% WI in Brasse. Both transactions were completed in Q4 2023. The partnership’s target is to undertake a fast-track, low-cost review to assess whether a value accretive development concept can be established for the estimated 27.64 mmboe gross recoverable Brasse volumes. The project is currently being matured as a tie-in to Brage concept with a final investment decision (DG3) planned in the first quarter of 2024.

Three bidders offering four rigs participated in ONGC’s four-jackup tender, three for Category I and one for Category II. For Category I, Shelf Drilling offered the 300-ft Trident XII, Dynamic Drilling offered the 328-ft Victory Driller, and Greatship offered the 350-ft Greatdrill Chaaya. For Category II, Shelf Drilling offered the 300-ft J.T. Angel. All four rigs are currently working for Oil and Natural Gas Corporation Limited (ONGC). The term for both categories will be three years. The operator is seeking 300-ft units of the MLT-116 C/BMC-300 design or equivalent for Category I and F&GL-786 Mod-II design or equivalent for Category II. The bidder will have to commit to mobilising the rig to a location within a period of 180 days from the date of the Notice of Award from ONGC. The operator conducted a pre-bid meeting in January 2024 attended by six drilling contractors, Aban Offshore, Greatship, Jindal Drilling, Shelf Drilling, Dynamic Drilling, and Ocean Oilfield.

Mobilisation/Rig Moves

Following SPS-related works, Stena Drilling’s 1,640-ft semisub Stena Don is leaving a yard in Norway and returning to the UK North Sea to continue working for Shell. The semisub arrived in Norway in early January 2024 to undertake some recertification works related to special periodic survey (SPS)/UWILD. The Phase 1 SPS work at the CCB base in Ågotnes, Norway has now been completed and the rig is going back to the North Sea to resume its Shell contract. Following its arrival, expected on 7 February 2024, it will work on the Arran field. The rig has been working for Shell since May 2023 and is under a firm contract with the operator throughout the year with a six-month option available thereafter. The rig is expected to go back to Norway and conduct the full SPS in Q4 2024.

Energy Drilling’s barge-type self-erecting tender-assisted drilling rig T-16 has arrived at Crystal Offshore’s Singapore yard to undergo upgrade and activation works before its contract. The T-16 is designed for development drilling involving multiple well slots on fixed wellhead platforms in up to 6,000 ft of water with pre-laid mooring. It has a contract with CPOC for the phase six development drilling campaign in the Malaysia-Thailand Joint Development Area. The planned start date of this charter, which carries options for up to a further nine months, is October 2024. Energy Drilling got hold of the T-16 in July 2023 when it acquired three tender assist rigs from Seadrill. Apart from the T-16, it acquired the T-15 and Vencedor, bringing the total fleet to six rigs.

Vantage Drilling 375-ft jackup Topaz Driller is expected to complete its two-well contract with Foxtrot offshore Cote D’Ivoire in March 2024, after which the rig will leave the region for contract preparations in Southeast Asia. Topaz Driller began work for Foxtrot in January 2023. Each well under this contract is expected to take around 30 days to drill. A previously available 30-day option is understood to have not been exercised, freeing the rig to leave West Africa by around late March 2024. Topaz Driller is first expected to go to Singapore, where it will undergo planned upgrades and other contract preparations before beginning a long-term contract with CPOC in the Malaysia-Thailand joint development area. CPOC will be funding the upgrades to the rig. Work with CPOC is expected to begin around the third quarter of 2024 with a 730-day firm contract with three 90-day options available.

Noble 12,000-ft drillship Noble Valiant has begun work for LLOG in the US GOM. LLOG is using the rig to drill a development well at Keathley Canyon Block 686 in around 6,147 ft of water. The rig’s newly-started contract with LLOG is for six months. LLOG exercised a six-month option for Noble Valiant in January 2024, keeping the rig working into early 2025.

Diamond Offshore 10,000-ft semisubmersible Ocean GreatWhite lost its lower marine riser package (LMRP) while working for bp in the West of Shetland area of the UK. Diamond Offshore is working with bp and local authorities in response to the incident and planning efforts to recover the equipment from the seabed. On 1 February 2024, Diamond Offshore had disconnected Ocean GreatWhite’s LMRP from the BOP on the well while waiting on harsh weather. The LMRP and deployed riser string unintentionally separated from the rig at the slip joint tensioner ring and dropped to the seabed. Diamond Offshore stated that it is investigating the incident and has initiated efforts to replace any missing or damaged equipment as well as recovering the LMRP and riser string. The company noted that the rig was not carrying out any drilling at the time of the incident, no employees were harmed, the rig maintained structural integrity and the well is secure with the BOP in place. At this time, there are no reports of damage to seabed infrastructure and no known environmental impacts or lower hull damage. Ocean GreatWhite is currently contracted to bp into August 2024, with priced options available that could keep the rig working into 2025.

Following an incident in which Diamond Offshore’s 10,000-ft semisub Ocean GreatWhite lost its lower marine riser package (LMRP) while working for bp in the West of Shetland area, the rig is expected to leave the field in the coming days and go to a port for a period of time. As a reminder, on 1 February 2024, Diamond Offshore had disconnected Ocean GreatWhite’s LMRP from the BOP on the well while waiting on harsh weather. The LMRP and deployed riser string unintentionally separated from the rig at the slip joint tensioner ring and dropped to the seabed. The incident is under investigation. Now, the Ocean GreatWhite is expected to unmoor at Schiehallion NW between 11-19 February, subject to weather and operations. It is then expected to leave the Schiehallion field and go to a port for a period of time. At the moment, it is unclear how long the rig will stay there. The mooring ground chain sections will remain in place while the rig is out of the area, with no surface buoys in place. Before this interruption, the semisub was under firm contract with bp into August 2024, which is now likely to be pushed right. bp also has further priced options available that could keep the rig working into 2025.

Due to a storm in Norway, Transocean’s 1,640-ft Cat D rig Transocean Encourage has recently lost its position and drifted for miles in the Norwegian Sea. The semisub rig, contracted to Equinor since late 2015, lost its position due to weather in the area in early February 2024 and is now sheltered in Kristiansund, Norway. Norwegian Ocean Industry Authority (Havtil) has confirmed the incident. According to Havtil, the rig was disconnected from the well and in a safe position awaiting the storm. No damage has been reported. In late November 2023, Havtil granted its consent to Equinor to use Transocean Encourage for production drilling at Vigdis and Tyrihans Sør fields. The rig has been working for Equinor under a contract announced in March 2023. The drilling programme consists of nine wells to be drilled on the Tyrihans, Verdande, Andvare, and Vigdis fields. The contract was further extended in July 2023, adding six wells to the rig’s backlog and keeping it firm into 2026.

Other News

Dolphin Drilling has received a further $3 million payment from Nigerian company General Hydrocarbons Limited (GHL), bringing the total collected on past due payments for work with the 6,000-ft semisubmersible Blackford Dolphin to $5.5 million. The semisub started a 12-month contract with GHL offshore Nigeria in March 2023 at a dayrate of $230,000. In November 2023, Dolphin reported that GHL had past-due payments totaling $17.3 million. Dolphin received a $2 million payment from GHL in January 2024, along with a payment plan proposal from the operator.

The deployment of a second BOP on the 12,000-ft drillship Deep Value Driller has been delayed but “will be taken care of as soon as possible,” according to rig owner Deep Value Driller AS (DVD). The drillship began work on 1 November 2023 offshore Côte d’Ivoire for Eni under an 11-well bareboat charter with Saipem. The rig moved on to a second well in January 2024. DVD AS stated that start-up for the rig had been “challenging” for Saipem. Work on the second BOP, which was undergoing final pressure tests in early November 2023, was originally to be finished 30 days after the first spud of a well. DVD said that all focus has been assisting Saipem in starting operations on the rig and work on the second BOP will be taken care of in full cooperation with Saipem. According to market sources, Eni recently issued a request for information for a deepwater floating rig to potentially drill a well offshore Côte d’Ivoire, with work beginning in the first half of 2024. This is understood to be in addition to work carried out by Deep Value Driller.

India is planning to invest about 67 billion dollars in the next 5–6 years to increase the percentage of gas in the country’s primary energy mix. This was shared by India’s Prime Minister Narendra Modi during the inauguration of India Energy Week 2024 in Goa on Tuesday. Modi noted rising production of domestic gas, which he attributed to the government’s reforms, and said the country was making efforts to increase the role of gas in the primary energy mix from 6 to 15 percent. This will see an investment of about 67 billion dollars in the next 5–6 years, he said. According to Modi, India ranks as the world’s third-largest energy, oil, and LPG consumer, and he said the country’s energy demand would double by 2045.

Norwegian oil and gas company DNO ASA has entered into an agreement for its subsidiary DNO Exploration UK to acquire a 25% interest in the Arran field in the UK North Sea from ONE-Dyas E&P Limited. The cash consideration for the transaction is $70 million plus a contingent consideration of up to $5 million if certain operational targets are met. The Arran field is operated by Shell. Production from Arran began in 2021 via a subsea tieback to Shell’s Shearwater A platform. DNO expect the transaction to close in Q2 2024, subject to approval by the authorities. The company expect the stake in Arran to add around 4 million BOE net to DNO, 90% of which is natural gas.

Deltic Energy has entered into an agreement for the farm-out of a 25% interest in the Shell-operated Licence P2437 in the UK North Sea, containing the Selene Prospect, to Dana Petroleum. This transaction, in combination with the existing Shell carry, results in Deltic retaining a 25% non-operated interest in Licence P2437 and having no exposure to 2024 drilling and testing costs up to a cap in excess of current success case well cost estimates provided by the operator. The recent estimate of well costs from Shell indicate a total success case cost of the Selene well at $47M. Deltic will transfer the 25% equity in P2437 to Dana in return for $500K in cash on completion in relation to back costs incurred by Deltic. Dana will carry Deltic for its residual cost exposure to the Selene well (after utilisation of the existing carry from the Shell farm-out) to a value of $5M, and $6M in a success case. Completion of the farm-out is conditional on obtaining consent from Shell and standard regulatory consents from the North Sea Transition Authority. Preparatory works for the Selene well continue to progress on time and according to plan. Geophysical and geotechnical site surveys have been completed and critical long lead items including casing have been ordered. Procurement processes are also well advanced with the rig contract for the 400-ft jackup Valaris 123 having been announced on 5 February meaning that the Selene well remains on track to be drilled in Q3 2024. Following Selene, the rig will also drill the Pensacola appraisal well.

Australian oil and gas firms Woodside and Santos said Wednesday they had stopped discussions over a potential merger. Santos said that, following the initial exchange of information, “sufficient combination benefits were not identified to support a merger that would be in the best interests of Santos shareholders.” Woodside CEO Meg O’Neill said that for every opportunity Woodside assesses, it conducts thorough due diligence and will only pursue a transaction that is value-accretive for its shareholders. “We continue to be disciplined in our approach to mergers and acquisitions and capital management to create and deliver value for shareholders. While the discussions with Santos did not result in a transaction, Woodside considers that the global LNG sector provides significant potential for value creation. According to Woodside, the company continuously assesses a range of organic and inorganic growth opportunities. Santos said that it continued to review options to unlock value for its shareholders.

Baron Oil’s subsidiary SundaGas has completed the farm-up deal for the Chuditch PSC offshore Timor-Leste with Timor GAP. Baron Oil’s subsidiary SundaGas has completed the farm out deal for the Chuditch PSC offshore Timor-Leste with Timor GAP. Back in December 2023, the two companies entered into a memorandum of understanding for the transfer of a 15% stake in the Chuditch PSC, offshore Timor-Leste, to TIMOR GAP. As part of the deal, TIMOR GAP will make a cash payment to SundaGas of c.US$1 million to cover back costs within 30 days, Baron Oil said Thursday. Baron Oil’s SundaGas retains operatorship of the Chuditch PSC and holds a 60% working interest. TIMOR GAP has a 40% interest, made up of a working interest of 15%, plus its original 25% interest which is carried to first gas. TIMOR GAP will be responsible for paying 20% of all costs in relation to the PSC, including the drilling of the planned Chuditch-2 appraisal well. The plan is to drill and flow test the Chuditch-2 appraisal well in late 2024, subject to rig and drilling services availability and the completion of drill financing.

Eldorado Drilling has secured $275 million in senior secured debt financing. Net proceeds from the transaction will be used to finance the delivery of the 12,000-ft newbuild drillship Zonda, contract readiness costs, working capital and general corporate purposes. Investment banks Fearnley Securities and Arctic Securities acted as financial advisors in the transaction. Eldorado acquired the 7th generation drillship Zonda from Samsung Heavy Industries in April 2023 and had previously raised money for the acquisition of Zonda and the 12,000-ft newbuild drillship Dorado via private placements. Zonda secured a three-year contract with Petrobras in 2023. This contract will begin in 2024, with the rig managed by Petroserv.

Eni wants to establish a production hub in the East Kalimantan region of Indonesia. This was shared this week during a meeting between Eni Chief Executive Officer Claudio Descalzi and Indonesia’s President Joko Widodo. During the meeting, Descalzi shared Eni’s Indonesia plans, especially on the back of significant milestones reached in 2023. These include the discovery of 5 trillion cubic feet (Tcf) of gas with the Geng North-1 well in the North Ganal PSC, the acquisition of Chevron’s assets in Indonesia, and the further consolidation of Eni’s position in the Kutei Basin through the acquisition of Neptune. According to Eni, Descalzi illustrated the development plans for the IDD assets and the new Geng North production hub to be established in the East Kalimantan region. He said these achievements would significantly enhance the country’s gas potential, also in consideration “of the significant near-field exploration potential in Eni-operated blocks, largely de-risked following the Geng North discovery.” The new 1 billion cubic feet per day gas production hub that will be established in the northern Kutei basin, as well as the extension of the plateau at 750 MMscfd in the existing facilities in the southern Kutei Basin, will allow Indonesia to increase its gas production significantly, both for domestic use and for export, Eni said. The new projects, along with the ongoing development of East Merakes and Maha fields, will increase the utilisation of the available capacity at the Bontang LNG plant, in addition to the gas required for domestic consumption. Eni has been operating in Indonesia since 2001, and its current equity production in the country is approximately 80,000 barrels of oil equivalent per day from the Jangkrik and Merakes gas fields in East Kalimantan.

DS Tungsten Explorer; Credit: Vantage Drilling