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Another busy week is behind us, and the earnings season for offshore drilling contractors is officially open following Odfjell Drilling's quarterly report on Thursday. Additionally, new contract awards have been confirmed for Borr Drilling, Noble, Transocean, and Valaris rigs.

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


Trident Energy has cancelled the contract for work with Island Drilling 4,000-ft semisubmersible Island Innovator offshore Equatorial Guinea. Trident’s partner has stated that the rig is not in a condition to safely drill the wells. Panoro Energy, Trident’s partner in Block 9 off Equatorial Guinea, where the drilling campaign started in January, said that, upon Trident’s recommendation, the joint venture decided to terminate the current rig contract. “The joint venture is of the view that the rig is not operationally in a condition to safely drill the wells. The Operator [Trident Energy] is, on behalf of the joint venture, evaluating alternative options that will allow for the recommencement and safe completion of the intended drilling campaign (including the Kosmos operated Akeng Deep exploration well) at the earliest opportunity, potentially during Q2 subject to rig availability and terms of alternative options,“ Panoro Energy said. Island Drilling has said that it is not making any official comment about the contract termination. While the rig’s name was not mentioned in the announcement from Panoro on Friday, it is known that Trident has been using Island Innovator for its Equatorial Guinea campaign. Neither Trident Energy nor Panoro have provided details on the specific safety concerns. However, market sources have indicated to Esgian that the cancellation may stem from issues with the rig’s BOP. John Hamilton, CEO of Panoro, said: “The joint venture will not compromise on safety, which is of paramount importance, and has acted decisively and responsibly in taking this course of action. Based on our current estimates, the pause in drilling is not expected to affect Panoro’s shareholder distributions, financial and operational targets for the year. The postponement of the drilling campaign results in a more beneficial phasing of capital expenditures on a group-wide basis.” Trident Energy started its infill drilling campaign at the Ceiba and Okume fields on Block G in Equatorial Guinea with the Island Innovator in January. The rig arrived in Equatorial Guinea for work with Trident Energy in November 2023. Trident Energy expected the three deepwater infill wells to come onstream by mid-2024. After the infill drilling campaign, the rig was to then move to Block S, where Trident Energy would use Island Innovator to drill the Akeng Deep exploration well on behalf of operator Kosmos Energy. Trident exercised its third one-well option for the Island Innovator in September 2023, with this work expected to keep the rig busy in Equatorial Guinea for much of 2024.

Island Drilling has responded to Trident Energy’s termination of the drilling contract for the 4,000-ft semisubmersible Island Innovator and stated that the company “is evaluating all legal recourse at its disposal to contest the termination.” The rig had begun a drilling contract on the Trident Energy-operated Block G offshore Equatorial Guinea. Trident Energy terminated the contract for Island Innovator on 8 February 2024. The company’s partners in Block G include Panoro Energy, Kosmos Energy and GEPetrol. Panoro Energy stated, “the joint venture is of the view that the rig is not operationally in a condition to safely drill the wells.” Market sources have indicated that the safety issues brought up by Trident and its partners are related to the rig’s blowout preventer (BOP). Island Drilling CEO Roger Simmenes said, “The statements being made by Trident and its partners are not an accurate description of the situation on Island Innovator. There have been no critical safety incidents. While there have been some technical challenges with the BOP, the BOP has been checked and tested by the OEM representative on board the rig and declared safe and ready for operations.” The 2013-built Island Innovator is equipped with a Cameron 15K EVO BOP stack.

Borr Drilling has announced new contract commitments totalling 495 days and $82.2 million in contract revenue for three of its premium jackup rigs, excluding mobilisation and demobilisation compensation. Following these new contracts, the company’s fleet contract coverage is 87% for 2024, including firm commitments and priced options. Firstly, BW Energy has extended the contract for the 400-ft Norve by approximately two months through July 2024. The rig has been working for BW Energy since late 2022 and its previous option was exercised in November 2023, extending the rig until June 2024. Following this latest extension with BW, the rig is scheduled to work for Tower Resources in Cameroon under a contract awarded in December 2023. Furthermore, the 350-ft Mist has secured a contract extension from a subsidiary of Valeura Energy in Thailand. The contract extension covers a firm term of 12 months starting in direct continuation to the current contract and will maintain the rig contracted through August 2025. The rig has been working for Valeura since early 2023. Valeura has recently announced plans to invest $8 million in pursuing exploration opportunities within its licences offshore Thailand. The company has identified exploration opportunities at Wassana North, Nong Yao D, and the Ratree Prospect, near the Jasmine field. Finally, the 400-ft Thor has received a binding Letter of Award from an undisclosed customer for work in Southeast Asia. This award will cover a firm scope of two wells, with an anticipated duration of 70 days, and is expected to begin in Q3 2024 in direct continuation of its current commitment. The jackup is currently operating for Petronas following its arrival at Ketapang PSC in late January 2024.

Petrogas has extended its contract for Noble 350-ft harsh environment jackup Noble Resolute in the North Sea by an additional 60 days, starting in March 2025. A 40-day option is also included. Noble Resolute has been working in the Dutch North Sea since mid-2022 under a rig sharing agreement between TotalEnergies EP Nederland B.V. and Petrogas E&P Netherlands B.V. that has the unit performing plug and abandonment and other drilling operations. Noble stated that the rig would use its selective catalytic reduction system to reduce NOx emissions during this upcoming work with Petrogas.

TotalEnergies has awarded Transocean 12,000-ft drillship Deepwater Skyros a three-well extension offshore Angola at a dayrate of $400,000, to run from January to June 2025. TotalEnergies also has a new priced option available for the unit, which if exercised would run from June to November 2025 at a dayrate of $400,000. Deepwater Skyros has been working for TotalEnergies offshore Angola since mid-2015. The rig’s current contract began in January 2023 at a dayrate of $310,000 and was previously expected to end in June 2024. However, this term has now been extended at the same dayrate until January 2025. The rig has class surveys due to take place in 2024.

Transocean 12,000-ft drillship Deepwater Invictus is working on a 40-day contract for an undisclosed client in the US GOM. Work is expected to conclude in late February 2024. Deepwater Invictus was last active in summer 2023, when it carried out 20 days of P&A work in the US GOM for an undisclosed client understood to be Woodside. Deepwater Invictus may leave the US GOM. In July 2023, Transocean was awarded a 1,080-day contract offshore Mexico with an undisclosed operator, understood to be with Woodside for the company’s Trion project. This work has currently been assigned to Deepwater Invictus and has a commencement window of 1 November 2025 to 1 August 2026. Under the terms of the contract, Transocean has the right to designate the work to either Deepwater Invictus, the 12,000-ft Deepwater Proteus or the 12,000-ft Deepwater Thalassa by 1 November 2024.

Following a recent announcement from an operator, Valaris has now confirmed a new contract award from Shell for its 400-ft heavy-duty jackup Valaris 123 in the UK North Sea. As reported in early February 2024, Shell will use the Valaris 123 for the drilling of the Selene exploration well and the Pensacola appraisal well in the North Sea. Valaris said in its fleet status report on Thursday that the two-well contract is expected to begin in June 2024. The contract has an estimated duration of 154 days and an estimated total value of approximately $21 million. The Valaris 123 has been in Dundee since November 2023 following the completion of a contract in the Dutch North Sea. It is expected to spend about 60 days out of service for planned maintenance during this quarter. In addition to this latest work scope with Shell, the unit also has two other jobs lined up for 2024. A one-well contract with Ithaca in the UK North Sea will precede and a CCS contract with TAQA in the Dutch North Sea will follow the contract with Shell.

Drilling Activity and Discoveries

The Norwegian Ocean Industry Authority (Havtil) has granted Wintershall Dea consent for exploration drilling in the North Sea off Norway. The well 35/11-27 S, targeting the Cuvette prospect, is located in production licence 248. The licence is operated by Wintershall Dea with Petoro participating as a partner. Drilling operations will be carried out with the Transocean Norge semisub, which is under a long-term contract with Wintershall Dea in Norway. The water depth at the site is 378 meters.

The Norwegian Ocean Industry Authority (Havtil) has granted Wellesley Petroleum consent for exploration drilling in the North Sea offshore Norway. The wildcat well 35/11-29 S, targeting the Toppand East prospect, is located in production licence 248 C, which is operated by Equinor with Wellesley Petroleum and Petoro participating as partners. Wellesley will operate the drilling of the prospect on behalf of the licence partners. The Norwegian Offshore Directorate (NOD) has already granted a drilling permit for the well. As previously reported, the partners in the licence assigned the 2,460-ft semisub COSLPromoter, which is under contract with Equinor, to drill this well. Drilling is planned to start on 1 March 2024 at the earliest, with a duration of 67 days upon discovery. The water depth at the site is 355 meters. Operations are scheduled to start in Q2 2024. Havtil’s consent for the same rig and operator also includes the drilling of the 35/10-12 S Gnomoria delineation well, which is expected to follow Toppand East. The Gnomoria well is located in the Wellesley-operated production licence 1184 S with a water depth of 363 meters.

The Norwegian Ocean Industry Authority (Havtil) has granted Aker BP consent for exploration drilling in the North Sea. The well 24/12-8 S, targeting the Rumpetroll prospect, is located in production licence 869, which is operated by Aker BP with Vår Energi as its partner. The water depth at the site is 118 meters. The well will be drilled with the Odfjell Drilling-managed 6,560-ft semisub Deepsea Nordkapp, which is firm with the operator throughout 2026 with further options thereafter. Drilling operations are scheduled for the third quarter. The Rumpetroll is 1 of 10 Aker BP-operated wells planned for drilling in 2024. The operator plans to drill 10 to 15 exploration wells per year, with a target of a net 250 mmboe from 2022 to 2027.

Galp Energia is preparing to drill the Mopane-2X well on PEL 83 offshore Namibia with the Odfjell Drilling-managed 10,000-ft semisubmersible Hercules. Following this, the rig will return to the Mopane-1X well for a drill stem test to evaluate the commerciality of the discovery. Galp CEO Filipe Silva stated that it is “highly possible” that the company may drill more wells within the block. Galp began its exploration campaign on the Orange Basin block in November 2023. Drilling and logging at the first exploration well Mopane 1X confirmed the discovery of two significant columns of light oil in reservoir-bearing sands. Mopane-2X is also targeting two reservoirs and will assess the extension of the find. Galp expects to begin the drill stem test at Mopane-1X in March 2024. Silva said during the company’s FY23 results call that by late March the company should know about the commerciality of the find and have a good view on the volumes of the reservoirs at Mopane. Silva called the company’s find “sizable” and said that the pressures, porosity and permeability at Mopane-1X were “very encouraging.” The harsh environment semisubmersible Hercules used for this exploration drilling camapign is owned by SFL Corporation.

Thailand-focused Valeura Energy has shared drilling plans for its Wassana and Nong Yao oil fields in the Gulf of Thailand. Valeura Energy is currently conducting a development drilling programme on its fully owned Wassana field, and it said that due to favourable initial results, it has decided to expand the scope of the programme from three horizontal wells to five. “All three wells drilled so far have encountered their targets in line with expectations. The first two wells have been tested and, in their first seven days of production, resulted in total field output increasing to more than 4,000 bbls/d. The third well will be brought online in the coming days. Management believes strong proven deliverability from the initial wells may result in an upward revision to its production expectations from the field,” Valeura Energy said. The company plans to continue drilling on the Wassana field, to a total of five wells, after which the rig will mobilise to the Nong Yao field to begin Nong Yao C development drilling. Valeura is using Borr Drilling’s 350-ft Mist jackup for its drilling operations in Thailand. This week, Borr Drilling said it had secured a contract extension with Valeura for the Mist that should keep the rig busy in Thailand through August 2025. At Nong Yao, where it has a 90% stake, Valeura Energy will soon hook up and commission (HUC) a recently converted jackup mobile offshore production unit that it hired from T7 Global, and upon HUC, it will start an initial drilling programme of up to nine development wells (six producers and three water injectors). The first production from the Nong Yao C extension is expected in late Q2 2024.

Vår Energi is increasing exploration activity in 2024 compared to 2023, with involvement in 16 planned wells targeting over 150 mmboe of net risked prospective resources. In 2023, the company’s exploration drilling included seven exploration wells. Five of the wells resulted in discoveries, one well was dry, and one well was temporarily abandoned due to drilling challenges. The overall exploration success rate at the year-end was more than 70%. During the fourth quarter, Vår Energi participated in the Equinor-operated Svalin M Sør exploration pilot well, in PL169, which resulted in a small oil discovery. The discovery is commercially viable and will be put into production through the existing Grane facilities. The operated Hubert well was spudded in late 2023, followed by the Magellan well in early 2024, both in the Balder area, and both wells were dry. Out of these 16 wells in 2024, 8 of which are Vår Energi-operated, 5 are located in the Barents Sea, 1 in the Norwegian Sea, 7 in the North Sea, and 3 more in the Balder area of the North Sea. These plans have an estimated annual spend of approximately $300 million. Vår Energi currently has two semisub rigs working for it in Norway, the Odfjell Drilling-managed 3,900-ft Deepsea Yantai and the Seadrill-owned 7,874-ft West Phoenix. In addition, the 4,921-ft semisub COSLProspector has recently arrived in Norway ahead of its two-year firm contract in the Barents Sea. On 31 January 2024 Vår Energi completed the acquisition of Neptune Energy Norge, creating the second largest independent E&P company on the Norwegian Continental Shelf (NCS). After the closing, Neptune Energy Norge is operating as a fully owned subsidiary of Vår Energi under the name Vår Energi Norge. The acquisition brought a pipeline of early phase projects, including Dugong, Fram Sør, Ofelia and Calypso.

TotalEnergies has completed the installation of the Fénix platform on concession CMA-1 offshore Tierra Del Fuego, Argentina. The operator and its partners will now focus on the next phase of the project, the drilling of three production wells with Noble 400-ft jackup Noble Regina Allen later this year. The newly installed Fénix platform is located in around 70 m (230 ft) of water. The platform is designed to be operated from shore without the need for a permanent crew. Noble Regina Allen will be temporarily located next to the platform for the drilling of three production wells, expected to begin in mid-2024. First gas production from Fénix is expected in November 2024. Noble Regina Allen has been undergoing repairs and contract preparations in the Netherlands since April 2023. The rig secured the three-well contract with a TotalEnergies subsidiary in September 2023. This term is expected to run around 220 days and has four one-well options available. TotalEnergies is the operator of Fénix and CMA-1 with a 37.5% interest. Wintershall Dea has a 37.5% interest while Pan American Energy has the remaining 25% interest.

Vår Energi has completed the drilling of wells 25/7-12 S and A in the North Sea off Norway, both of which are dry. The wells are located 200 kilometres northwest of Stavanger. After getting a drilling permit in October 2023 for the Hubert and Magellan prospects, Vår Energi drilled the wells, located in production licence 917, in December 2023 and January 2024, respectively. The 3,900-ft Deepsea Yantai rig was used for the drilling operation. The well 25/7-12 S encountered the Hermod formation with a total thickness of 34 metres, of which 30 metres were sandstone rocks of good reservoir quality. The well was dry. The well 25/7-12 A encountered the Horda formation with a total thickness of 49 metres, of which about two metres was sandstone rocks with good to very good reservoir quality and with traces of gas. The Balder formation was encountered with a thickness of 85 meters in total, of which about 11 metres was a sandstone layer with very good reservoir quality. The Hermod formation was encountered with a total thickness of 36 metres, of which 14 metres was of very good reservoir quality and with traces of hydrocarbons. The wells have been permanently plugged and abandoned. The rig is now at the Ringhorne North location in Vår Energi’s production licence 956.

Eni has announced the successful completion of the Cronos-2 well, drilled to evaluate the Cronos-1 discovery in Block 6, offshore Cyprus, made in August 2022. Cronos-2 was drilled using the 10,000-ft Transocean Barents rig, approximately 160 km southwest of the Cyprus coast, and encountered multiple carbonate reservoir intervals, boasting a net reservoir thickness of 115 meters. The production test enabled the estimation of a well production capacity exceeding 150 MMSCFD in production configuration. Two additional discoveries, Calypso-1 and Zeus-1, were made on the same Block in 2018 and 2022, respectively. Eni’s presence in Cyprus dates back to 2013. Eni holds a 50% interest in Block 6, with TotalEnergies as its partner. Furthermore, Eni operates Blocks 2, 3, 8, and 9, and holds participating interests in Blocks 7 and 11, both operated by TotalEnergies.

Equinor’s exploration well 35/11-28 S (Harden Sør) in the North Sea off Norway proved to be dry. The well 35/11-28 S is located in production licence 248 C where Equinor is the operator with Petoro and Wellesely Petroleum as partners. This is the sixth well to be drilled in the licence. Equinor secured a drilling permit for the well in November 2023. Drilling operations started in January 2024 with the 10,000-ft Deepsea Stavanger semisub. The drilling was carried out 130 kilometres northwest of Bergen and 9 kilometres west of the Fram field. The water depth at the site is 359 metres. The well was drilled to a vertical depth of 3270 metres below sea level and was terminated in the Heather Formation in the Upper Jurassic. It encountered the Heather Formation with a total depth of about 117 metres, 29 metres of which were a sandstone reservoir with moderate to poor reservoir quality and traces of hydrocarbons. The well is classified as dry and it has been permanently plugged and abandoned.

The Norwegian Ocean Industry Authority (Havtil) has granted Aker BP consent for exploration drilling in the North Sea. The consent is related to the drilling of the well 24/6-5, targeting Alvheim Deep, located in production licence 203. The licence is operated by Aker BP with ConocoPhillips participating as a partner. The water depth at the site is 120 meters. Drilling operations will be carried out with the 492-ft CJ70 jackup Noble Integrator during the second quarter of 2024. Aker BP plans to drill 10 to 15 exploration wells per year and this is one of the wells planned for this year. The jackup is currently working for Harbour Energy on the Amethyst wildcat well off Norway, which was spud in January 2024. After that, the rig is scheduled to work for Aker BP.


UK’s Labour Party has proposed to extend and increase the rate of the Energy Profits Levy (EPL), also known as the windfall tax, on oil and gas producers in the country. Offshore Energies UK, a trade body for the sector, has asked for an urgent meeting with the Labour leadership following plans revealed on Thursday to extend the windfall tax further. OEUK says that Labour’s plans to “end loopholes” in the levy have led to uncertainty among energy companies that the party may remove critical allowances that enable companies to make long-term investments in homegrown production. Based on the limited information provided by Labour, OEUK has warned this will likely result in no new investments being made in UK oil and gas projects with the impact being felt immediately. Labour has also said it will raise the current 75% windfall tax to 78% until 2029. OEUK says this announcement was made without engagement with the industry. Labour’s proposal comes as part of the party’s finalisation of policies ahead of general elections and its wider Green Prosperity Plan, which is expected to be funded by the windfall tax on the oil and gas sector and borrowing to invest. The introduction of the windfall tax on oil and gas producers in the UK in 2022 eroded investor confidence in the North Sea and led to a curtailment of spending plans, resulting in lower investment and reduced activity in the region. In June 2023, the government decided to make changes to the EPL. Due to this change, the current total 75% tax rate would be removed if oil and gas prices fall to ‘historically normal levels’ for two consecutive quarters and returned to 40%, the rate before the EPL was introduced.

Portuguese company Galp Energia is assessing new options for exploration offshore São Tomé and Príncipe beyond 2024. Galp is the operator of Block 6 offshore São Tomé and Príncipe with a 45% interest and the operator of Block 12 with a 41.2% interest. Galp also holds a 20% interest in the Kosmos Energy-operated Block 11. In 2022, Galp and its partner Shell drilled the Jaca-1 exploration well on Block 6 with the 12,000-ft drillship Maersk Voyager (now Noble Voyager). Galp stated that this well had proved the existence of a working petroleum system on the block.

Mobilisation/Rig Moves

Transocean 12,000-ft drillship Deepwater Aquila is preparing to leave Singapore for Rio De Janeiro, Brazil shortly, where the rig has a contract with Petrobras lined up. Transocean took delivery of the 7th generation drillship from Hanwha Ocean in South Korea in early October 2023. Since then, the rig has been in Singapore undergoing contract preparations. The unit has a three-year contract with Petrobras scheduled to begin in the third quarter of 2024.

Well-Safe Solutions’ 1,200-ft semisub Well-Safe Defender is en route to the Appleton field in the UK North Sea. Following the completion of a long-term P&A campaign on the Chestnut and Trees fields for Spirit Energy, the semisub is heading to its next assignment with the same operator. The move from the Birch field in block 16/12a to the Appleton 30/11b-4 well location was previously expected to occur at the end of December 2023. The Appleton job is expected to last about a month. Once the rig is clear of these obligations, it is expected to work for Apache who got access to the rig through a framework agreement announced in early 2023.

Transocean 12,000-ft drillship Discoverer Inspiration has left the US GOM and is en route to Las Palmas in the Canary Islands. Discoverer Inspiration has been idle in the US GOM since the second quarter of 2023, when it completed around five months of plugging and abandonment work for Hess. According to Transocean’s latest fleet status report, the rig had no upcoming contracts as of mid-February 2024. The 2009-built rig, which is classed by DNV, has its main class renewal and other surveys due by late October 2024.

Other News

Baron Oil’s subsidiary SundaGas has entered into contracts to conduct a survey at the planned offshore drilling location for the Chuditch-2 appraisal well in Timor-Leste. Baron Oil’s subsidiary SundaGas has entered into contracts to conduct a survey at the planned offshore drilling location for the Chuditch-2 appraisal well in Timor-Leste. Site survey operations are expected to be carried out at the location during February and early March 2024. The objective of the site survey is to identify any potential hazards at the proposed well site, ensuring that a drilling rig can be safely located there with minimal environmental impact. The site survey work consists of geophysical studies and physical investigation of the seabed and shallow geological section. Baron Oil said that SundaGas maintained dialogues with other companies active in the region to identify operational synergies for the drilling of the Chuditch-2 appraisal well. These discussions have resulted in the opportunity to acquire the site survey in partnership with an undisclosed nearby operator. “The estimated cost savings that derive from sharing services and vessel mobilisation compared to standalone acquisition are significant. In addition, the shared operation enables SundaGas to acquire the Site Survey earlier than originally planned, enabling aspects of well design to be accelerated and the environmental approval submissions to be expedited,” Baron Oil said. 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. Worth noting, Baron Oil’s subsidiary SundaGas last week farmed out a 15% stake in the Chuditch PSC to Timor GAP. After the farmout, SundaGas retained operatorship of the Chuditch PSC holding a 60% working interest. With the acquisition of the 15% stake, TIMOR GAP increased its holding in the PSC to 40%.

Tower Resources has received formal notification from the Minister of Mines, Industry and Technological Development in Cameroon of the extension of the first exploration period of the Thali production-sharing contract to 4 February 2025. Tower Resources has the obligation to drill a single well during this period and intends to drill the NJOM-3 well this year. The company is in discussions with several parties regarding asset level financing for the well. In December 2023, Tower Resources contracted Borr Drilling 400-ft jackup Norve to drill NJOM-3. The rig is expected to be able to mobilize to Cameroon following the conclusion of its work with BW Energy offshore Gabon. Norve received a two-month extension with BW Energy in February, which is expected to keep it working through July 2024.

Oil and gas company Jadestone Energy has confirmed its participation in the bid to acquire Woodside’s participating interests in the Macedon and Greater Pyrenees Projects offshore Western Australia. The proposed acquisition would include Woodside’s interests in the Macedon producing gas field and a cluster of producing oil fields collectively known as the Pyrenees Area. Woodside’s net working interest production from the Macedon field and Pyrenees Area in the second half of 2023 averaged c.28,000 boe/d. Jadestone said it would update shareholders on the proposed acquisition as appropriate. Morgan Stanley is managing the bid process on behalf of Woodside with respect to the proposed sale.

The SFL Corporation-owned harsh-environment CJ70 jackup Linus is scheduled to undergo its 10-year special periodic survey (SPS), due before June 2024, in the coming period. The 450-ft Odfjell Technology-managed jackup is under a long-term contract with ConocoPhillips on the Greater Ekofisk Area in Norway through Q4 2028. The rig received a new Acknowledgment of Compliance from the Petroleum Safety Authority, now Norwegian Ocean Industry Authority, in October 2022. In its Q4 2023 report on Wednesday, SFL said that the DNV-classed rig is scheduled to undergo the 10-year SPS in Q2 2024, with an estimated net capital expenditure of approximately $30 million. It is expected to be off hire for approximately five weeks.

Jadestone Energy has acquired a non-operated 16.67% working interest in the Cossack, Wanaea, Lambert, and Hermes (CWLH) oil fields development, offshore Western Australia, from Japan Australia LNG (MIMI) Pty Ltd. As a result, Jadestone Energy’s non-operated working interest in the CWLH fields has increased to 33.33% (from 16.67%). The acquired interest includes the seller’s entire 16.67% working interest in the CWLH oil fields, subsea infrastructure, Okha FPSO, and full abandonment liabilities. Paul Blakeley, President and CEO of Jadestone, said that the imminent early March 2024 lifting proceeds were expected to substantially offset the net cost of the first two abandonment funding instalments. Jadestone’s next cargo, attributable to the 16.67% interest just acquired, is estimated at c.650,000 barrels and has been sold at a small premium to Brent with the lifting scheduled for early March 2024. The receipt of proceeds for this lifting is expected in early April 2024. Two further liftings of similar size are expected within the next 12 months – one attributable to the original 16.67% interest (estimated timing in the fourth quarter of 2024) and the other attributable to the 16.67% just acquired (estimated timing in early 2025). Jadestone said Wednesday that the CWLH fields continued to perform ahead of the company’s expectations, averaging c.13,700 bbls/d year to date in 2024, equivalent to c.2,300 bbls/d for the 16.67% interest being acquired or c.4,600 bbls/d to the company’s total 33.33% interest following completion. The CEO said the company’s increasing ownership and influence would help to realise the full potential of the fields through a life extension beyond 2031 and additional drilling. In November 2023, when it first announced the proposed transaction, Jadestone said it believed that there was potential to add incremental reserves through infill drilling, targeting unswept oil across all four of the CWLH fields; and extending the asset life beyond 2031 (the initial design life of the Okha FPSO).

ADNOC and bp have agreed to form a new joint venture (JV) focused on natural gas in Egypt. The JV will be 51% owned by bp and 49% owned by ADNOC, with bp contributing its interests in three development concessions and its exploration agreements in Egypt, while ADNOC will make a proportionate cash contribution. Subject to regulatory approvals and clearances, the formation of the incorporated JV is expected to be completed during the second half of 2024. Concessions that will be included in the JV are Shorouk, North Damietta, and North El Burg offshore concessions in Egyptian waters of the Mediterranean and the North El Tabya, Bellatrix-Seti East and North El Fayrouz exploration concessions agreements. Shorouk contains the producing Zohr field and is operated by Belayim Petroleum (Petrobel), a joint venture between Egyptian General Petroleum Corporation and Eni. In 2017, bp acquired a 10% interest in Shorouk from Eni. North Damietta contains the producing Atoll field and is operated by Pharaonic Petroleum Company (PhPC), a joint venture between bp and EGAS, with bp holding a 100% interest. PhPC also operates the North El Burg field, which contains the undeveloped Satis field. bp has a 50% interest in North El Burg, with IEOC holding the remaining 50% interest.

The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) has confirmed that bp’s exploration licences EL 1168 and EL 1148 in the Orphan Basin offshore eastern Newfoundland have expired as of mid-January 2024. Both licences were operated by bp with 50% interest, with Hess and Noble Energy holding a 25% interest in each licence. No drilling took place on EL 1148 but bp drilled the Ephesus exploration well on EL 1168 with Stena Drilling 10,000-ft drillship Stena IceMAX in 2023. The well was spudded in May 2023 and abandoned by the end of June 2023. According to C-NLOPB data, bp’s EL 1166 and EL 1170 licences off eastern Newfoundland are still active at this time.

Offshore drilling contractor Odfjell Drilling recorded an increase in its revenues both on a quarterly and yearly basis. Odfjell Drilling posted Q4 2023 revenues of $192 million, compared to revenues of $167 million in Q4 2022. For the full year 2023, the company recorded revenues of $732 million, which is a 12.8% increase from revenues of about $650 million in 2022. The company’s net profit in Q4 2023 totalled $24 million, compared to $29 million in Q4 2022. In 2023, the company recorded net profit of $222 million, compared to $83 million in 2022. The rig owner has an order backlog of $2.1 billion, compared to $1.9 billion at the end of 2022. Currently, between 2024 and 2027, 85% of the company’s own fleet drilling capacity is covered by firm backlog, with the remaining 15% being priced and unpriced options. Kjetil Gjersdal, CEO of Odfjell Drilling, stated that the company is “in the healthiest position it has ever been.” During the quarter, the company completed the planned Special Periodic Survey (SPS) on the 6,560-ft Deepsea Nordkapp, with the unit remaining on contract throughout. This is the first time this has been achieved by any rig offshore Norway. As a result, the rig was still able to achieve a financial utilisation of 99% during Q4. The company has two SPS projects scheduled for 2024, for the 10,000-ft Deepsea Atlantic (Q2) and the 10,000-ft Deepsea Aberdeen (around Q4), and one for 2025, for the 10,000-ft Deepsea Stavanger (Q1). For these three remaining projects, the company reiterates previous indications of 2-4 weeks downtime and a cost of $40-45 million per rig.

Dolphin Drilling has announced the beginning of operations and the final transfer of ownership for two semisub rigs acquired from Transocean. Dolphin announced the acquisition of the 1,969-ft Paul B. Loyd, Jr. and the 5,500-ft Transocean Leader from Transocean back in June 2023. The rigs were acquired for net $50 million, whereof $6.1 million was paid in Q3 2023 (gross $64.5 million less net cash flow earned since June 2023). The estimated EBITDA from the firm backlog covers for more than three times the net acquisition price. “We see strong interest for our offshore floater rigs in the UK sector,” says Bjørnar Iversen, CEO of Dolphin Drilling. The Paul B. Loyd, Jr. has a firm revenue backlog of $280 million with Harbour Energy. Following the closing of the rig acquisition, the Paul B. Loyd, Jr. will be under contract with Harbour Energy in the UK with the firm period until February 2028, with another 5 x 1-year option periods thereafter. In addition, the company has entered into a 5+5 year master service agreement (MSA) with Harbour Energy. Iversen explained that the MSA allows Dolphin Drilling to work in close strategic cooperation with Harbour, adding that the UK drilling market is showing positive signs.

Image: SS Deepsea Stavanger; Credit: Odfjell Drilling

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