Ensco Lands Leviathan Rig Deal
Noble Energy has hired Ensco’s ENSCO DS-7 ultra deepwater drillship for its giant Leviathan field, offshore Israel.
The agreement for the ENSCO DS-7 includes the drilling two wells, and completing of four production wells at the field, in the Mediterranean Sea. The deal includes four one-well priced customer options that if fully exercised would extend the contract into 2020. The contract is expected to begin in March 2018, and be completed in December 2018.
According to Ensco, the ultra deepwater drillship will be upgraded with a second blowout preventer.
“This upgrade, combined with the rig’s dual derricks and other technical specifications, will make it one of the most capable assets in the global fleet,” says Ensco.
The company expects the upgrade to cost less than US$10 million, since it will utilize a blowout preventer currently in inventory.
Following its upgrade, the ENSCO DS-7 will mobilize to the Mediterranean Sea to begin its contract with Noble Energy.
Leviathan is estimated to hold 22 Tcf, and will be developed in phases. Stage 1A, which is on track and set for first gas by the end of 2019, will have a capacity of 12 Bcm per annum (1.2 Bcf/d) and cost $3.5-4 billion.
The development will be a subsea system that connects production wells to a fixed platform located offshore with tie-in onshore in the northern part of Israel.
“Our recent contract awards underscore that there is strong customer demand for the type of high-specification assets that will be added to Ensco’s fleet through our pending acquisition of Atwood, which will create a leading global offshore drilling company and better position us as the market recovery cycle unfolds,” says Ensco CEO and President Carl Trowell.
Just last month, Noble and its Leviathan partners decided to drop the Atwood Advantage drillship, operated by Atwood Oceanics, from its contract to drill the Leviathan 5 and 7 wells, in favor of a cheaper deal.
In late-May, Ensco announced it entered a deal to acquire Atwood in a $839 million deal. The deal was unanimously approved by each of the company’s board of directors in May.
Last week, Ensco and Atwood filed definitive proxy materials with the US Securities and Exchange Commission (SEC) for the proposed merger. Shareholders of each company are scheduled to vote on the proposed merger on 5 October.
Noble Energy operates Leviathan with a 39.66% interest. Noble’s partners are Delek Drilling (22.67%), Avner Oil Exploration (22.67%), and Ratio Oil Exploration (15%).
Source: www.oedigital.com
