Equinor Awards Contract To Odfjell For Deepsea Atlantic Rig
Zacks Investment Research | May 28, 2018 12:31AM ET
Equinor ASA (NYSE:EQNR) has awarded a contract to Odfjell for the use of the Deepsea Atlantic rig.
The contract relates to spudding of six wells that comprises drilling of three production wells each for the Fram and Askeladd licenses. Per the terms, the first rig contract has been inked for Deepsea Atlantic. Odfjell has also received a master framework agreement (MFA). This framework will be used as an example for other future rig contracts on the Norwegian continental shelf.
Deepsea Atlantic, a semi-submersible 6th generation mobile drilling rig, is expected to commence operations in January 2019.
The value for the six wells contract is projected in the range of $150-200 million. Along with drilling services, the rig owner is in charge of casing running, slop treatment and cuttings handling, remote control vehicle (ROV) as well as fuel management. Initially, the contract is for 18 months that might get extended.
Deepsea Atlantic is currently on contract with Equinor and its license partners. The rig, which is likely to be under contract with Equinor for a 10-year classification, will first conclude a drilling program for the Visund and Utgard licenses.
First, the three so-called dual multilateral wells on the Fram field will be spud by the rig. The wells will include two branches, which will diverge from the main wellbore. Thereafter, the rig will move to Askeladd to drill three production wells. The logistics bases at Mongstad and Hammerfest will support the operations. The contract with Deepsea Atlantic fortifies the letter of intent announced by Odfjell Drilling on Apr 16, 2018.
Fram Vest located in the North Sea came online in 2006. Two years later, the field attained its plateau rate of 50,000 barrels of oil per day and peak production was reached more than a decade ago at over 60,000 barrels of oil per day.The field is estimated to be in production for the next 15 years. Per Equinor, the three wells in the Fram complex could produce 70 million new barrels of oil and gas.
Askeladd is not expected to start yielding before 2022. The regulator estimates the field to hold about 31 million barrels of oil.
Recently, the company changed its name to Equinor from Statoil (OL:EQNR) as it wanted to remove oil from the name. This is a major move recently taken by many energy players keeping in mind the effect of greenhouse gas emission.
Price Performance
During the past three months, Equinor’s shares have gained 10.3% against the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.