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Bassoe Offshore AS

11/27/2020 | News release | Distributed by Public on 11/27/2020 08:42

Bassoe Rig Analytics weekly rig market round-up (week 48)

Nov 27, 2020

This week Maersk was confirmed as the winner of Total's two-rig tender covering work off Suriname, meanwhile Noble Corp was cleared to exit bankruptcy with a plan that transfers control of the business to its bondholders and lowers debt by more than $3 billion.

In case you missed it, you can access last week's Rig Market Round-Up here.

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Rig Contracts

Maersk Drilling has received a Conditional Letter of Award (CLOA) from Total E&P for the supply of two deepwater rigs, semisub Mærsk Developer and drillship Maersk Valiant, for an exploration and appraisal project in Suriname's Block 58. The campaign is expected to commence in early 2021, with an estimated firm combined duration of 500 days. The estimated firm total contract value is approximately USD 100 million, including rig upgrades and integrated services provided. The CLOA is conditional upon finalization of the formal contract as well as certain other customary conditions.

Odfjell Drilling reports that two letters of intent signed with Equinor earlier this year have now been firmed up into full contracts. This covers drilling campaigns at the Norwegian Johan Sverdrup Phase 2 and Breidablikk developments using harsh-environment semis Deepsea Atlantic and Deepsea Aberdeen, respectively. The Breidablikk drilling campaign is subject to PDO approval.

Archer has secured a five-year contract from Aker BP with an additional three-year extension option for the provision of platform drilling operations and maintenance services on the Ula and Valhall installations in the Norwegian sector of the North Sea. The contract will commence January 1, 2021 in direct continuation of the current contract. Archer will deliver platform drilling, maintenance services and intervention support, including further integrated engineering, rental equipment and well services where required as part of its OneArcher service offering.

Drilling Activities & Discoveries

CNOOC has commenced its drilling campaign using Borr Drilling jackup Prospector 5 offshore the UK. The rig is committed to the operator until Q2 2022.

Total has completed drilling operations at the Luiperd-1 wildcat well off South Africa using Odfjell Drilling harsh-environment semisub Deepsea Stavanger and the rig is now moving to Cape Town. The contract completed earlier than expected and Total will compensate Odfjell Drilling for 180 days in operation, including the current duration of the first well. The semisub is expected to shortly begin mobilizing back to Norway and will restart operations with Aker BP under a new 5-well campaign next year.

Due to inclement weather, jackupValaris JU-247 remained offshore the UK with Total longer than expected but is due to move to Dundee this week for stacking.

Total has completed its drilling campaign using ultra-deepwater drillship Pacific Khamsin in the US Gulf of Mexico and the rig has now moved to anchorage. The rig has no further commitments yet in place.

Rig Demand

Tullow Oil says that it is still planning to commence a new multi-well drilling campaign offshore Ghana, starting in second quarter of 2021. It is understood that the operator is nearing an award for a deepwater rig to undertake the approximate 1.5-year campaign.

PetroRio reports that it will start the contracting of services and a drilling rig to carry out a development campaign at its Brazilian Wahoo development in early 2022 with he campaign to initially cover drilling of four wells. Drilling is expected to commence in late 2022 or early 2023, with first oil expected in 2024. Two further water-injector wells could then be drilled in 2026 if necessary. Meanwhile, the operator is also planning an infill drilling campaign at the Frade field as part of the 'Frade revitalization project'. It is understood that the same rig would be used for both campaigns.

Ithaca Energy is working on moving ahead with Stage II of its Captain Enhanced Oil Recovery Program, which features polymer enhanced oil recovery. The 'Stage II' program involves the drilling of up to ten additional wells (four producers and six injectors) to optimize oil recovery from the area of the Upper Captain Sands reservoir that is produced using subsea wells. Various supply chain tendering activities are currently ongoing for the Stage II, with a view to sanctioning the development before the end of 2020. The development involves a multi-year campaign of activities aimed at maximizing oil recovery from the field into the 2030s.

Rig Mobilizations

Transocean harsh-environment semisubTransocean Barents has completed its journey from Canada to Norway. The rig is currently stacked in Olen and is being bid on new work campaigns in the North Sea.

JackupShelf Drilling Tenacious has departed the port of Hamriyah, UAE, and is headed to Oman where it is due to commence a new contract with Masirah Oil. The campaign will cover drilling of two development wells at the Yumna field and one exploration well in Block 50, with operations beginning in December.

Shelf Drilling jackup Parameswara has commenced mobilization offshore India in preparation for commencing a new one-well plus one-well option contract with Adani.

Ultra-deepwater drillshipStena IceMAX has begun its journey from the Canary Islands to the Bahamas. The rig is set to begin a one-well exploration campaign, targeting the Perseverance prospect, for Bahamas Petroleum Company before the end of this year.

Newbuilds & Rig Sales

Awilco Drilling reports that it continues to assess all options for cold-stacked semisub WilHunter, both reactivation and sale, but is now in a more active process than previously, assessing a few specific alternatives. Meanwhile, it also added that its newbuild semisub Nordic Spring, which had been due for delivery in March 2022, is going to be 'significantly delayed'. Remaining capital commitments at the end of the third quarter in respect of this rig were USD 382.3 million.

Oil Price

Further oil price improvement was witnessed this week, with five days of increases recorded by Thursday with Brent futures up over $49 a barrel early on Thursday, meanwhile West Texas Intermediate was just above $46 a barrel. This further rise comes after after a fall in US crude inventories and continued optimism for Covid-19 vaccines.

Energy Transition

Maersk Drilling has reported that the Greensand carbon capture and storage (CCS) project had cleared its first major hurdle, with DNV GL deeming carbon dioxide injection into the intended subsea reservoir feasible. DNV GL confirms that the Nini West field is conceptually suitable for injecting 0.45 million tonnes CO2 per year per well for a 10-year period, and that the subsea reservoir can safely contain the CO2 in compressed form. Project Greensand targets having the first well ready for injection from the Nini platform in 2025. Longer term, the ambition is to develop the capacity to store approximately 3.5 million tonnes CO2 per year before 2030. Maersk Drilling expects that Project Greensand will provide important learnings about how offshore drilling rigs and capabilities can be used to re-purpose existing oil wells for CO2 injection and handle well modifications during the injection period.

Odfjell Drilling has decided to re-brand the Drilling & Technology segment to Energy to help 'create opportunities for growth in the existing portfolio and new markets within the energy sector and other potential areas'.

Financial

Noble Corp has been cleared to exit bankruptcy with a plan that transfers control of the business to its bondholders and lowers debt by more than $3 billion. Judge David R. Jones of the U.S. Bankruptcy Court in Houston on Friday confirmed Noble's chapter 11 plan that is built on a debt-for-equity swap with bondholders and a settlement of multibillion-dollar litigation over the company's 2014 spinoff of Paragon Offshore PLC. Noble says bondholders have agreed to pump in $200M of new capital in the reorganized business through the issuance of new second-lien notes, and it has lined up $675 Million in loans to further fund the business upon its exit from bankruptcy.

Awilco Drilling PLC reported contract revenue for Q3 2020 of USD 10.6 million, compared with USD 6.4 million in the prior quarter of the year. EBITDA for Q3 2020 was USD 1.7 million against a USD 1.5 million loss in Q2 and a net loss of USD 1.0 million compared with a USD 4.6 million loss during Q2. Revenue efficiency was 100% during the standard dayrate work in the quarter and operational uptime was 100% during the quarter during the standard day rate work in the quarter. Contract backlog at the end of Q3 was approximately USD 15.2 million (USD 19.4 million Q2).

For the third quarter of 2020, Odfjell Drilling reported operating revenue of USD 210 million compared to USD 215 million in Q3 2019 and EBITDA of USD 87 million compared to USD 94 million during the same period last year. For the mobile offshore drilling unit segment, the company recorded operating revenue of USD 151 million compared to USD 155 million in Q3 2019 and EBITDA of USD 76 million compared to USD 81 million in Q3 2019. The Group's contract backlog is USD 2.6 billion, whereof USD 1.4 billion is firm backlog. The comparable figure at the end of Q3 2019 was USD 2.1 billion, whereof USD 1.1 billion was firm backlog.

For the third quarter of 2020, Constellation reported a net operating revenue increase of 153.8% year-over-year to USD 69.1 million in 3Q20. Meanwhile, revenues from ultra-deepwater (UDW) units represented 87.3% of total net revenues in 3Q20, up from 65.5% in 3Q19. Adjusted EBITDA totaled negative USD 17.5 million and the Adjusted EBITDA margin was negative 25.3% in 3Q20. Net loss during the period was USD 74.6 million, down from a net loss of USD 141.5 million year-over-year and the total backlog as of September 30, 2020 was USD 624.2 million.

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Data: Bassoe Analytics, Image attribution: Maersk Drilling.