Hans Jacob Bassoe, Esgian

This week Noble Corporation and Maersk Drilling received the green light from the Norwegian Competition Authority for their merger, while Maersk also entered into a rig-swap agreement with Aker BP. Meanwhile, Valaris was awarded two new contracts in the US Gulf of Mexico.

Contracts 

Maersk Drilling and Aker BP have entered into a rig swap agreement whereby jackup Maersk Reacher is to be replaced by the low-emission jackup Maersk Integrator offshore Norway end-February/early March 2022. Maersk Integrator will be prepared for well intervention and stimulation activities at the Valhall and Hod fields. The previously announced Maersk Reacher work scope will accordingly be transferred on to the Maersk Integrator with an added scope estimated to eight months, which means that Maersk Integrator will be employed until January 2023. This contract swap arrangement will add approximately USD 29m to Maersk Drilling’s revenue backlog. Maersk Integrator is an ultra-harsh environment CJ70 XLE jack-up rig, designed for year-round operations in the North Sea and featuring hybrid, low-emission upgrades. It was delivered in 2015 and is currently warm-stacked in Åmøyfjorden outside Stavanger, Norway after completing a drilling campaign for Aker BP in November 2021.

Harsh environment semisub Stena Don's Morocco drilling campaign has come to a close after a successful exploration and appraisal campaign for Chariot Oil. Stena Don first drilled exploration well Anchois-2 which discovered over 100m of net pay, followed by a re-entry at Anchois-1. The semisub has begun its demobilisation back to the UK sector.

Later this year, as part of its current drilling contract with Equinor, CAT D, harsh-environment semisub Transocean Enabler will drill one carbon injection well and a sidetrack for another carbon injection well (drilled early 2020) in support of the Northern Lights Carbon Capture Storage Project, a joint venture created by Equinor, Shell and TotalEnergies. The project sets out to mitigate emissions and remove carbon dioxide from the atmosphere by creating the first cross-border, open-source carbon dioxide transport and storage infrastructure network in the European Union.

Valaris has been awarded two one-well contracts with Murphy Oil for semisub Valaris DPS-5. The first contract is in the US Gulf of Mexico and is expected to commence in Q3 2022 with a duration of at least 30 days. The contract includes a one-well option with an estimated duration of 90 days. The second contract, which will commence in direct continuation of the first contract, is offshore Mexico and is expected to last 60 days. The semisub is currently moored in Pascagoula where it is undergoing renewal of its SPS certification. 

Maersk Drilling has been awarded a contract with TotalEnergies for provision of jackup Maersk Reacher for well intervention services in the Danish North Sea. The contract is expected to commence in July 2022, with a duration of 21 months plus up to 27 additional months of options. Maersk Reacher is a 350ft, Gusto-engineered MSC CJ50 high-efficiency jackup, which was delivered in 2009. It is currently operating offshore Norway where it is scheduled to be replaced in a rig swap with Maersk Integrator end-February/early March 2022. Maersk Reacher will undergo a special periodic survey prior to commencing the contract with TotalEnergies

Drilling and discoveries

Semisub Well-safe Guardian is now en route to the UK Hannay field to start a plug and abandonment contract for Repsol Sinopec. The rig also has P&A work lined up with CNR International this year. 

Lundin Energy is concluding drilling of the exploration well 6306/9-1 within PL 886 in the Norwegian North Sea and has classified the well as dry with no traces of petroleum. The well encountered 152m of sandstone, 73m of which were presumably in the Rogn formation from the Upper Jurassic Age, with good to very good reservoir quality. In the secondary exploration target, the well encountered about 76m of tight basement rock. The wildcat well was drilled by Odfjell's harsh environment semisub Deepsea Stavanger, which will now move to a shipyard in Bergen.

Beach Energy has announced reaching first gas from the two first wells of its offshore Otway Basin campaign. The two wells, Geographe 4 and Geographe 5, have been connected to the Otway Gas Plant and are now delivering gas into the East Coast market following the completion of the commissioning phase. Also, drilling and testing of Thylacine North 1 well, the third well in the 6-well development campaign, was also recently completed and the semisub Ocean Onyx is now preparing to move to the Thylacine West 1 well followed by two more Thylacine development wells. Diamond Offshore's Ocean Onyx was contracted to Beach Energy in for the 6-well programme back in August 2020.

In the US Gulf of Mexico, Beacon has successfully completed the drilling of  appraisal well Winterfell-2 has been on block 943 in the Green Canyon, according to block partner Kosmos Energy. The well discovered approximately 40m of net oil pay in the first and second horizons with better oil saturation and porosity then pre-drill expectations. The exploration tail has discovered an additional oil-bearing horizon in a deeper reservoir which is also prospective in the blocks immediately to the north. The appraisal well will further increase the central Winterfell area's current estimated resource potential which is currently about 100 million barrels (gross). 

Demand

Japanese oil company INPEX plans to drill an exploration well offshore Japan. The planned well is located 150km offshore north of Yamaguchi prefecture and 130km offshore northwest of Shimane prefecture in water depth approximately 240 meters. Drilling operations are scheduled from March to July 2022.

BHP is planning an infill development drilling campaign, using a semisub, at its Pyrenees oil field offshore Western Australia in 2022 or 2023. The campaign is expected to take three to four months and will include work at the  Crosby-3H1 and Crosby-4H2 well locations, and at the Stickle-4H1 well location within production licence WA-42-L. Water depth in the area is around 200m. Pyrenees is one of the assets that will transfer to Woodside Petroleum under a merger agreement between Woodside and BHP's oil and gas subsidiary BHP Petroleum.

Rig Mobilisation

Drillship Valaris DS-16 and semisubmersible Valaris DPS-5 have arrived at the shipyard in Pascagoula and are now undergoing maintenance ahead of their upcoming drilling campaigns. Valaris DS-16 is undergoing reactivation ahead of its two-year contract with Occidental in the US Gulf of Mexico, while Valaris DPS-5 is undergoing its five yearly SPS renewal ahead of its contract with Kosmos Energy.

Transocean semisub Paul B Loyd Jr has completed its drilling campaign with Harbour Energy offshore the UK and has now moved inshore Invergordon. The rig’s next confirmed campaign, which will be with Serica also in the UK sector, will begin in Q3 2022.  

Financial 

Noble Corporation and Maersk Drilling were recently advised that the Norwegian Competition Authority (Konkurransetilsynet) has reviewed the Business Combination application pursuant to the filings submitted to it and has no objection to the Business Combination. The process for obtaining the other approvals is ongoing. The Parties cannot provide any assurance as to whether all required approvals and consents will be obtained or the timing of, or conditions to, such approvals if they are obtained.

Reference is made to Borr Drilling Limited's announcement 28 December 2021 about the subscription and allocation of a total of 13,333,333 new depository receipts (the "Offer Shares"), raising gross proceeds of USD 30 million. As stated in the announcement, a condition for completion of the Equity Offering is board approvals by the Singaporean yards for amendments to and refinancing of the Company's financing arrangements with the yards. The Company is expecting the board decisions of the Singaporean yards in the week of 24 January 2022 due to their current scheduling of board meetings. Therefore, the date of settlement of the Offer Shares is adjusted to be on or about 28 January 2022, subject to satisfaction of the other closing conditions referred to in the announcement 28 December 2021. The Offer Shares will be listed on the Oslo Stock Exchange (“OSE”) upon delivery. No Offer Shares will be offered or sold in transactions on the NYSE.

Other Market news

TotalEnergies and INPEX has agreed to sell subsidiary Angola Block 14 B.V to the Angolan oil company Somoil. The subsidiary company was owned 50.01% by TotalEnergies and 49.99% by Inpex and holds a 20% interest in block 14 and a 10% interest in block 14K, offshore Angola. The two blocks have been producing since 1999 and the net production from Angola Block 14 B.V. was 9,000 boe/d in 2021.

German oil & gas company Wintershall DEA has decided to terminate all operations in Brazil and close the office in Rio de Janeiro. The decision is the result of an analysis of the company's global portfolio and evaluation of individual projects and how they fit in the long-term strategy. Wintershall holds participating interest in a total of nine exploration licenses offshore Brazil, spread over Potiguar, Ceara, Campos and Santos Basins. 

The Norwegian Ministry of Petroleum and Energy has announced awards from the predefined areas (APA) from its 2021 round. The country has awarded 53 new offshore licences, 28 f which are in the North Sea, 20 are in the Norwegian Sea and five are in the Barents Sea. A total of 28 companies have been awarded stakes in the licences including the likes of Equinor, Aker BP, ConocoPhillips, Wintershall Dea, Lundin, DNO, Okea, Shell and Vaar. 

KeyFacts Energy Industry Directory: Esgian