Bassoe Offshore AS

09/11/2020 | News release | Distributed by Public on 09/11/2020 06:29

Bassoe Analytics weekly rig market round-up (week 37)

Sep 11, 2020

The past week has been a mixed bag for the offshore rig market with two new rig awards, one contract extension, two projects delayed from 2020 to 2021, and a four-year contract termination.

In case you missed it, you can access last week's rig market round-up here.

Rig Contracts

Equinor has awarded a new three-well plus 12 one-well options campaign for further use of jackup Noble Lloyd Noble, this time for work in Norwegian waters. Work under the firm part of the deal, which will cover operations at the Valemon field, will begin in June 2021 and last until January 2022 at least. The firm part of the contract has a value of around USD 51 million. The rig is currently working for the same operator in the UK sector under a contract that has also been extended from September until late November this year.

Japan Drilling Company (JDC) has secured a new one-well contract for its jackup Hakuryu-11 with Mitsui Oil Exploration Co., Ltd. The rig will be put to work from June 2021 at the Tenpoku Seiho Oki area, offshore Hokkaido, Japan. Operations are scheduled to take approximately 80 days.

ExxonMobil has declared one of the nine one-well options on its contract for jackup Noble Tom Prosser, which is operating in Australian waters. There will be no change to the rig's term however, as the program is already ahead of schedule. The current estimated contract end is late October 2020.

Jadestone Energy's two-well Australian charter of jackup Valaris JU-107 has been postponed by one year. The drilling campaign is now set to begin during June 2021. The rig has no other commitments in place is currently warm stacked.

ADNOC has cancelled its four-year agreement for use of Valaris JU-104 offshore the UAE, which was set to begin later this month. The rig has no other firm commitments in place and it is understood that it will now be stacked.

Serica Energy confirms that it now plans to start its contract at the UK Columbus field using jackup Maersk Resilient in a window between March and July 2021. Drilling under the one-well campaign was originally due to begin in late 2020. Operations will take around 70 days.

Rig Demand

Tullow Oil confirms that it is in the tendering process for another rig to work offshore Ghana in 2021, now that it has released ultra-deepwater drillship Maersk Venturer. Sources indicate that this will e a long-term campaign, beginning in H1 2021.

In Namibia, Tullow Oil is awaiting the outcome of the Venus-1 well, which is expected to be drilled by Total in the fourth quarter of 2020 on a block to the south of Tullow's PEL-90 acreage, before deciding next steps for drilling in its own PEL 37 licence.

Edison E&P has submitted a formal request to enter the second exploration period in the Egyptian North East Hap'y Offshore block. Although the exploration well drilled during the first exploration phase did not find commercial hydrocarbons, Edison E&P and ENI are evaluating a large, Zohr-like structure for a potential well in the second exploration phase.

Drilling Activities & Discoveries

Woodside has completed its contract using semisub Valaris DPS-1 offshore Australia and the rig has now moved inshore. The unit had previously been due to continue operating under the contract until September 2021, however the contract was terminated a year early.

BHP Billiton is now due to commence operations using jackup Noble Regina Allen offshore Trinidad and Tobago at the end of September. The drilling campaign will continue until at least early April 2021 with three one-well options also available.

ExxonMobil has made its 18th discovery offshore Guyana at the Redtail-1 well, which will add to the previously announced estimated recoverable resource of more than 8 billion oil-equivalent barrels on the Stabroek Block. The well is located around 1.5 miles northwest of the Yellowtail discovery and was drilled using ultra-deepwater drillship Noble Don Taylor.

Neptune Energy has started drilling the 6406/12-G-1 Bue well at the Fenja field in the Norwegian Sea, using Seadrill harsh-environment semisub West Phoenix. The well will act as a pilot for the location of the Fenja field's production and injection wells and will support the appraisal of the Bue discovery. The well will also enhance understanding of the Frisbee prospect, which is located just below Bue.

Medco Energi says that its Terubuk-5 exploration well off Indonesia intersected several oil and gas pays and well testing is now ongoing for three DST intervals. The rig will complete the well and commence drilling of a new well of West Belut-1.

Equinor plans to drill new wells on the Norwegian Martin Linge field following an in-depth analysis of four gas wells drilled at the field before the company took over as the operator from Total in 2018. This review concludes that several of the wells do not have the necessary barriers. Equinor therefore plans to drill new wells in order to ensure safe production. Jackup Maersk Intrepid recently started the drilling operations at the field. The costs of drilling up to three new wells total about NOK 2 billion.

According to various reports, Sino-Ocean-managed jackup Dynamic Momentum has left China and is now headed for the UAE ahead of starting a new three-year contract with ADNOC in December.

Harsh-environment semisubDeepsea Aberdeen has begun moving from the UK sector to Bergen, Norway. The rig is still under contract with BP until April 2022, but has completed its current work scope in the West of Shetlands area. Odfjell has not yet commented on the forward plans for the rig or whether the contract will continue.

Gulf Drilling jackupZhenhai 3 (ex-Java Star 3) has completed its move from China to Qatar and will shortly commence a new long-term deal with Qatar Petroleum at its North field.

In Croatia, Edison E&P expects to spud the Irena-2 appraisal well during the fourth quarter of this year, using Crosco jackup Labin. It will target the same gas-bearing horizon that was successful in Irena-1 and, in the event of a success, the well will be suspended for future production.

It is now anticipated that jackupSatti will begin its three-well exploration campaign with BP at the Shallow Water Absheron Peninsula project, SWAP, offshore Azerbaijan during Q1 2021. The campaign will cover drilling of the North Khali (NKX01), Qarabatdag (QBDX01) and Bibiheybat (BHEX01) exploration wells.

Newbuilds & Sales

Valaris says that it is planning to retire 8 floating rigs and 13 jackups in the 2020 to 2025 period.

Financial Information

Borr Drilling announced that it has received written notice from the NYSE that it is not in compliance with the NYSE continued listing standard with respect to the minimum average share price of USD1 per share over 30 consecutive trading days. Under NYSE rules, a company has six months following receipt of the notification to regain compliance with this continued listing standard to avoid delisting, and the company's common shares will continue to be listed and to trade on the NYSE during this period. Borr Drilling has responded to the NYSE to confirm its intent to cure this non-compliance.

Kosmos Energy has entered into an agreement with B.V. Dordtsche Petroleum Maatschappij (Shell) a wholly-owned subsidiary of Royal Dutch Shell, to farm down interests in a portfolio of frontier exploration assets for approx. $100 million, plus future contingent payments of up to $100 million. Under the terms of the agreement, Shell will acquire Kosmos' participating interest in blocks offshore Sao Tome & Principe, Suriname, Namibia, and South Africa. The consideration consists of an upfront cash payment of approximately USD 100 million, plus contingent payments of USD 50 million payable upon each commercial discovery from the first four exploration wells drilled across the Assets, capped at USD 100 million in aggregate. Three of the four wells are currently planned for drilling next year.

Oil Price

Brent oil fell below $40 per barrel on Wednesday for the first time since June, due to a resurgence in Covid-19 cases in several countries.


President Trump announced that he was extending and expanding a ban on new offshore drilling sites off the Florida coast as well as the coasts of Georgia and South Carolina. The existing moratorium covers the Gulf of Mexico, and Trump said the new one would also cover the Atlantic coast - a significant political concern in coastal states like Florida.

Get on-demand offshore rig values from Bassoe Analytics

  • Bassoe Analytics has launched Bassoe Analytics Valuation service, a subscription service which provides users 24/7 offshore rig valuations as well as access to Bassoe Analytics Premium which provides rig market data and analysis platform.
  • Bassoe Analytics Valuation Service provides users with 24/7 valuations on over 800 offshore rigs as well as contractors' fleet values, using a clear valuation methodology including multiple drivers.
  • Bassoe Analytics Premium provides users with continuously updated data and analysis on the offshore rig market including latest transactions and fixtures, contract overview, dayrates, rig sales, utilisation and more. If you would like further details regarding this service, please get in touch with Barry Young.

Did you know that Bassoe Analytics has launched Bassoe Analytics Premium, a subscription service which gives users enhanced access to our offshore rig market data and analysis platform?

Learn more about Bassoe Analytics here

Do you have the Bassoe Analytics mobile app?

On the back of the success of the Bassoe Analytics website, we've decided to go mobile. Now you can access our open source offshore rig database when you're on the go. Find out more and download the app from the Google Play or App Store here.

Data: Bassoe Analytics, Image attribution: Noble Corporation.