Azule Energy, the joint venture between the Angolan assets of BP and Eni, has announced a farm-in agreement with Rhino Resources Namibia for a significant stake in an offshore oil block in Namibia’s Orange Basin
The deal will grant Azule Energy a 42.5% interest in Block 2914A in production exploration licence PEL 85, situated in Namibia’s prolific Orange Basin. Azule Energy also has the option to become the operator of PEL 85, pending customary approvals from Namibian authorities and joint venture parties.
Rhino Resources currently serves as the operator of the block with an 85% stake, Namibia’s National Petroleum Corp holds a 10% stake and local company Korres Investments owns the remaining stake.
The companies plan to drill two high-impact exploration wells in the area, with the first well expected to commence operations by the end of 2024.
Last week, Chevron announced a subsidiary would assume an 80% working interest in PEL 82 offshore Namibia. Azule Energy and Chevron’s decisions to expand their presence in Namibia comes on the heels of Portuguese multinational Galp Energia making a prolific oil discovery, estimated at nearly 10Bn barrels of oil, in Namibia’s Orange Basin.
Shell and Total have made major discoveries in Namibia over the last year, generating tremendous industy excitement. The Graff, Venus and Jonker - drilled by Shell and TotalEnergies - discoveries are estimated to hold about 11Bn barrels of oil and 8.7Tn cubic feet (tcf) of gas in the Orange Basin.
Contracts and fleet updates
In the Middle East, ADES Holding Co received contract awards for its jack-ups in Qatar and Egypt. The contract from Suez Oil Co (SUCO) in Egypt is for a 21-month jack-up drilling contract in the Gulf of Suez, expected to commence in the coming weeks. The SUCO drilling campaign will utilise a standard jack-up unit from ADES’ fleet and is valued at SAR161M (US$43M).
And a SAR350M (US$93M) deal with TotalEnergies will see ADES deploy and operate a jack-up in Qatar.
ADES said the new award come on the heels of recently awarded campaigns in Qatar and Thailand that are slated to commence operations in the second half of 2024. Together, these new awards bring ADES’ total redeployments of the recently suspended rigs in Saudi Arabia to three out of five jack-ups.
Texan drilling contractor Noble Corp anticipates a further rise in day rates and several long-term deals. The company’s latest fleet report shows the contract backlog stands at US$4.4Bn as of 6 May 2024.
Noble Corp’s fleet of 16 drillships was 76% contracted through Q1, compared with 75% in the prior quarter. Industry utilisation has stabilised over the past year, with mid-90%s contracted utilisation of the marketed fleet of ultra-deepwater floaters. Day rates for tier-1 drillships are now approaching or eclipsing US$500,000 per day, with discounts applicable for longer-term duration fixtures and for lower-specification sixth-generation floaters.
Within the latter category, Noble Corp’s Globetrotter I, Globetrotter II and Noble Developer drillships continue to have limited backlog and are being actively marketed for 2024 and 2025 opportunities.
Jack-up utilisation improved to 67% in Q1, up from 61% utilisation during the prior quarter. Noble Corp said though the jack-up market is still digesting the release of several rigs from the Middle East, this hasn’t impacted the North Sea and Norway markets where Noble Corp’s jack-up fleet is primarily concentrated. Leading edge harsh environment jack-up day rates are in the mid-US$200,000s per day in Norway and US$130,000 to US$150,000 per day in other parts of the North Sea.
Offshore driller Valaris has reported its Q1 results for 2024. The drilling contractor expects a sustained upcycle for the offshore drilling industry supported by demand growth, OPEC+ production cuts and positive prices for oil and gas.
The company said it remains focused on securing work for the remaining available days across its fleet in 2024 and is preparing VALARIS DS-7 for its expected contract startup in Q2.
Valaris chief executive Anton Dibowitz said, “We see strong customer demand for work that is expected to commence in 2025 and 2026, highlighting the longevity of this upcycle.” Valaris is now focused on securing attractive contracts to support its anticipated earnings and cash flow growth over the next few years.
In Q1, the company was awarded new contracts and extensions with a backlog of over US$520M. The total contract backlog has swelled to more than US$4Bn as of 30 April, representing a 43% increase from 12 months ago.
Floater revenues increased to US$324M from US$263M in Q4 2023. The increase was primarily attributed to the drillship VALARIS DS-8 which commenced a contract in late December following its reactivation, and higher revenue efficiency across the floater fleet in Q1 2024 compared with the previous quarter.
The new contracts and extensions for VALARIS DS-8 and a multi-year contract offshore Angola for VALARIS 144 at a leading-edge day rate for a benign environment jack-up brought in an associated contract backlog totalling over US$520M.
Jack-up revenues decreased to US$152M from US$179M in Q4 2023, primarily due to fewer operating days, with several rigs experiencing idle time for contract preparations and special periodic surveys prior to the start of their next contracts.
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