Bassoe Analytics weekly rig market round-up (week 46)
In case you missed it, you can access last week's rig market round-up here.
Rig Contracts
In its recent fleet update, Shelf Drilling announced that it has secured a new one-well plus one-well option deal for its jackup Parameswara with Adani offshore India. Work will begin later this month. Additionally, the driller confirmed that Masirah Oil is behind the recent award for jackup Shelf Drilling Tenacious offshore Oman. The rig will commence work next work under the initial two-well deal.
Meanwhile, Main Pass IV, has had operations suspended with Saudi Aramco following completion of the ongoing out-of-service project through December 2020 and Eni has suspended operations with its jackup Key Singapore and the rig is now on standby in Tunisia. The unit had been scheduled to move to Italy to undertake a new commitment for Eni, however this has been removed from the rigs schedule. Eni still has a one-year option available to use the rig.
Maersk Drilling has secured a contract from Brunei Shell Petroleum Company Sdn. Bhd. (BSP) for the 7th generation drillship Maersk Viking to drill one deepwater exploration well offshore Brunei Darussalam. The contract is expected to commence in March 2021, with an estimated duration of 35 days. The firm contract value is approximately USD 9 million, including additional services provided and a mobilization fee. The contract includes an additional one-well option.
Drilling Activities & Discoveries
Jackup Shelf Drilling Enterprise is now scheduled to begin work with Chevron Thailand in late December 2020 due to COVID-19 related logistical challenges. This is around two months later than initially planned.
ConocoPhillips has made a new gas condensate discovery with its 6507/4–1 (Warka) well in the Norwegian sector, drilled using Transocean harsh-environment semisub Leiv Eiriksson. Preliminary estimates place the size of the discovery between 50 and 190 million barrels of recoverable oil equivalent.
Rig Demand
It is understood that Shell has approached the market looking for a harsh-environment semisub to drill at least one well at the Norwegian Ormen Lange field in Q1 2022. The operator is also looking for a one-well option.
Equinor has awarded contracts for concept studies to further progress the Wisting development towards a final concept select decision during Q2 2021, with plans to reach FID by end-2022. The licence partners have decided to further assess a floating production unit based on a circular FPSO solution, and electrification is also considered as a possible option for reducing field emissions. It is understood that the operator has already started assessing harsh-environment, high-spec semisub availability and the project could consist of up to 36 wells.
It is understood that Energean Oil & Gas is planning to resume drilling offshore Israel next year and is contemplating an approximate eight-month campaign, using an ultra-deepwater rig.
Rig Mobilizations
Seadrill ultra-deepwater drillship West Capella has started its mobilization offshore Malaysia to begin a two-well plus options contract with Petronas.
Constellation semisub Atlantic Star has commenced its move offshore Brazil to begin a three-year contract with Petrobras.
Newbuilds & Rig Sales
Shelf Drilling has listed 1982-built Trident 15, 1979-built Randolph Yost, 1978-built Galveston Key, 1983-built Key Hawaii and heavy swamp barge Hibiscus as "held for sale“.
Petrobras has issued another extension to the deadline with Sete Brasil to complete the conditions of their agreement before finalizing any rig contracts. The deadline is now 31 January 2021 as opposed to the earlier date of 14 November.
Energy Transition
Corvus Energy has been selected by National Oilwell Varco (NOV) to supply the Energy Storage System (ESS) for another PowerBlade™ installation. PowerBlade is energy storing unit developed by NOV that receives and provides energy based on operational needs on board offshore drilling units. PowerBlade is used in two ways to move towards a cleaner and more efficient future for offshore drilling: energy regeneration and peak shaving, each of which is explored below. A study of the PowerBlade installation and other energy optimization projects were carried out while drilling with Odfjell Drilling semisub Deepsea Atlantic. Estimated savings on this specific drilling rig for the entire project, including the PowerBlade installation, were 6.5 tonnes of diesel, 20 tonnes of CO2, and 300 kg of NOx per day compared to log data prior to the project.
Financial
For the third quarter of 2020, Shelf Drilling reported revenues of $127.4 million, a 17.8% sequential decrease compared to Q2 2020. Meanwhile, it reported adjusted EBITDA of $39.3 million, representing an adjusted EBITDA margin of 31% and a net loss of $7.7 million. This is due to a number of drilling contracts which were suspended, terminated or not extended as a result of the COVID-19 pandemic and the subsequent deterioration in oil price.
Pacific Drilling S.A.announced that it is commencing solicitation of votes on its proposed prearranged chapter 11 plan of reorganization. On November 10 , the United States Bankruptcy Court for the Southern District of Texas—Houston Division entered an order, among other things, (i) conditionally approving the Disclosure Statement for the First Amended Joint Plan of Reorganization of Pacific Drilling S.A. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code and (ii) scheduling a combined hearing on December 21, 2020 to consider (a) final approval of the Disclosure Statement and (b) confirmation of the First Amended Joint Plan of Reorganization of Pacific Drilling S.A. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code. The voting deadline is December 14, 2020 at 5:00 p.m. (prevailing Central Time).
Other News
Zentech Inc has been awarded the Structural Engineering scope for the conversion of a ex-Borr Drilling jackup Atla to an Offshore Installation for BW Energy. Prior to acquisition, Zentech carried out an engineering study and survey onboard the rig as part of an initial study to identify the feasibility of the Mobile Offshore Drilling Unit (MODU) in the field. Zentech will carry out all structural engineering for the conversion to an Offshore Installation (OI) as per the rules and regulations for ABS Classification Society. This project is expected to be completed by Q1 of 2022.
Equinor announced that it has awarded Baker Hughes, Haliburton, and Schlumberger contracts for drilling and well services on the Bacalhau field in Brazil with total value estimated at USD 445 million. The contracts have a firm period of 4 years and two 2-year options. It also said that it is moving the project toward a FID planned in 2021 with first oil in 2024. It is understood that the operator is in tender process for a high-specification drillship to undertake the development drill, which will have a four-year duration plus options.
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Data: Bassoe Analytics, Image attribution: Maersk Drilling.
