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Norwegian state-owned energy giant Equinor has exercised options to drill additional wells with an Odfjell Drilling-owned rig, extending the rig’s backlog further and prolonging its stay on the Norwegian Continental Shelf (NCS).
According to Odfjell Drilling, Equinor has exercised options for seven wells to extend the use of the Deepsea Aberdeen semi-submersible rig on the Breidablikk field located in the central part of the North Sea, ten kilometers northeast of Grane, at 130 meters of water depth. The offshore drilling contractor highlights that these options are slated to start in mid-1Q 2025 in direct continuation of the current firm period and extend the firm backlog for the rig until the end of 4Q 2025.
Based on Odfjell Drilling’s data, the exercised options have a value of approximately $138 million, excluding integrated services, performance, and fuel incentives. This extension was enabled by the contract the two players entered into in November 2020, following a letter of intent from October 2020. The deal covered a scope of fifteen firm wells and an estimated duration of 2.5 years, plus nine optional wells. The rig received an Acknowledgement of Compliance (AoC) from the PSA in February 2021.
In addition to the exercised wells, the contract for the Deepsea Aberdeen rig entails further optional periods which, if exercised, could keep the rig busy until 2029. Odfjell Drilling elaborates that these optional periods consist of six optional wells followed by three further optional periods of eight wells each. The rates for all optional periods are expected to be mutually agreed upon before Equinor exercises any of the optional wells.
Kjetil Gjersdal, Chief Executive Officer of Odfjell Drilling, commented: “We are pleased to confirm this extension which will see the Deepsea Aberdeen continue its work with Equinor on the Breidablikk field. We look forward to building on the successful collaboration with Equinor which has seen the Deepsea Aberdeen drill the initial Breidablikk wells ahead of schedule, paving the way for early production on the field. The One Team approach with its focus on safe, low-carbon, cost-effective wells has proven yet again to deliver impressive results.
“With the exercised optional wells Odfjell Drilling will see substantial cash flow earlier than forecasted as the rig moves to a higher day rate level. The extension mechanisms now agreed could see the Deepsea Aberdeen remain in continuous operation with Equinor until 2029, delivering strong, predictable cash generation from the unit.”
The 2014-built Deepsea Aberdeen is a harsh environment semi-submersible, dual derrick rig of enhanced GVA 7500 design. It is capable of working at water depths of up to 3,000 meters. It has eight mooring lines and can accommodate 157 people. With a 7,500 mt loading capacity in all operating conditions, the rig’s drilling depth capacity is 10,670 m. |
