Eirik Raude wins Falklands drill deal

Falkands-bound: Ocean Rig semisub Eirik Raude

Premier Oil has chartered Ocean Rig's semi-submersible Eirik Raude to carry out an initial six-well exploration campaign off the Falkland Islands under a pooling arrangement with Noble Energy.

The oil company pair had kept the lid on the identity of the rig when revealing the contract earlier on Wednesday but the drilling subsidiary of Greek shipowner DryShips later confirmed the harsh-environment, deep-water semi-submersible Eirik Raude had indeed secured the charter, as reported by Upstream.

The rig is reported to have taken the deal ahead of Seadrill drillship West Navigator that was earlier tipped to win the lucrative contract.

Ocean Rig said the 260-day firm part of the charter is worth $165 million in backlog, yielding a dayrate of around $634,600.

The contract covers drilling of four firm wells for Premier in the North Falkland basin starting early next year, including an appraisal of its Sea Lion discovery on which development plans are moving forward, as well as two for Noble in the South and East Falkland basins.

The pair also have another eight optional rig slots to be exercised before mobilisation of the rig and a further eight options that can be activated during the drilling campaign.

The rig will initially drill a pair of wells for Premier targeting the Zebedee and Isobel/Elaine prospects – with the Isobel Deep Fan complex the main target for the latter - early in the second quarter of 2015 after it arrives in late February or early May.

Premier said it believes Isobel/Elaine has the potential to be a discovery on the same scale as Sea Lion, where reserves are currently estimated at 293 million barrels of oil.

The rig will then move south to drill the two wells for Noble before returning to the North Falkland basin to sink further probes for the British explorer at the Jayne East and Chatham/Sea Lion West Flank targets.

Rockhopper Exploration, a partner with Premier in all four wells being drilled in the North Falkland basin, estimates the quartet hold gross in-place oil resources of 1.9 billion barrels, including a potential 425 million barrels in the fourth probe to appraise Sea Lion.

The Zebedee, Isobel Deep Fan and Jayne East prospects are estimated by Rockhopper to hold gross in-place volumes of 941 million barrels, 241 million barrels and 289 million barrels respectively.

The first three prospects being targeted by Premier are located in its operated licence PL004 to the south and east of the Sea Lion field and are estimated by partner Falkland Oil & Gas (FOG) to hold combined prospective recoverable oil resources of 200 million barrels net to the latter’s 40% interest, indicating a total figure of 500 million barrels.

In the event of discoveries, all four prospects could be developed as tiebacks to the tension-leg platform proposed for the $5.2 billion first phase of the Sea Lion development or with an additional TLP.

FOG, which is also participating in the two Noble wells, said drilling locations for the pair are likely to be decided in the third quarter based on data from recent 3D seismic surveys covering a total area of 12,000 square kilometres.

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