Rig: Ocean Rig Athena

Ocean Rig Athena On Route to Greece

Ocean rig has reached an agreement with ConocoPhillips to terminate the contract on the Ocean Rig Athena. ConocoPhillips will pay a termination fee as part of the termination agreement. The Ocean Rig Athena has now left Las Palmas and is on route to Greece where the rig will be cold stacked.

Senegal Drilling Update: Successful SNE-4 appraisal well

The SNE-4 appraisal well offshore Senegal has been safely drilled, cored and logged ahead of schedule and under budget. Well results have successfully demonstrated the extension of the SNE oil field upper reservoir units in the eastern portion of the SNE field. The Operator, Cairn Energy PLC, has provided notice to release the Ocean Rig Athena drill ship after completion of SNE-4 operations. Evaluation of the extensive data set acquired from the highly successful SNE-2, SNE-3, BEL-1 and SNE-4 appraisal wells is continuing. The JV is evaluating development options and will determine the most effective way to further appraise this world class oil accumulation. Drilling is expected to resume in H2 2016.

Spud of SNE-4 appraisal well

The SNE 4 well, which is 5 km south-east of the SNE-1 discovery well, was spudded over the weekend to appraise the eastern extent of the field. The SNE-4 well is located in 940m water depth and will be drilled to a total depth of 3,020m TVD. It will be drilled and logged and is expected to take approximately four weeks to complete. This further appraisal well in the SNE field will assist in progressing towards confirming the commercial viability of the field.

BEL-1 well starts drilling offshore Senegal

Following the successful drilling of the first two appraisal wells offshore Senegal, the third well to be drilled as part of the SNE oil field appraisal program offshore Senegal has been spudded. The BEL-1 well will be drilled in approximately 1,100 metres of water and drilled to a TDVSS (total vertical depth subsea) of approximately 2,757 metres before an evaluation program including logging and coring is undertaken (refer figures 1 and 2). The aim of the appraisal program is to progress towards proving a minimum economic field size for the SNE discovery, which FAR estimates to be approximately 200 million barrels of oil. In addition, the BEL-1 well will drill the Bellatrix exploration prospect which will evaluate the untested Buried Hills play. BEL-1 will also be deepened to appraise the northern portion of the SNE oil field (refer figure 3). Drilling of the BEL-1 well will be followed by a wireline logging and coring program before the well is plugged and abandoned according to plans. BEL-1 operations are expected to be completed next month. FAR and its joint venture partners will be operating a tight hole policy, and therefore FAR does not anticipate making any further announcements regarding the drilling program until the BEL- 1 well has reached TDVSS.

Successful Senegal Appraisal Well

Cairn is pleased to announce the successful testing of the SNE-2 appraisal well offshore Senegal with positive results. Operations have been safely and successfully completed following drilling, coring, logging and drill-stem testing (DST). The well is now being plugged and abandoned. Following this first successful appraisal well, resource estimates for the SNE field will be fully revised and announced after the results of the further appraisal activity. Evaluation of the extensive dataset collected is continuing, with preliminary analysis focused on the DST. The SNE- 2 well is located in 1,200m water depth and is approximately 100 kilometres (km) offshore in the Sangomar Offshore block, reached the planned total depth (TD) of 2,800m below sea level (TVDSS). The well has been appraising the 2014 discovery of high quality oil in the SNE-1 well, some 3 km to the south.

SNE-2: First appraisal well starts drilling offshore Senegal

The first appraisal well to be drilled on the SNE oil field located 100km offshore Senegal has been spudded. The SNE-2 well will be drilled in approximately 1,100 metres of water and drilled to a TDVSS (total vertical depth subsea) of approximately 2,770 metres before an evaluation program including logging, coring and flow testing is undertaken. Three evaluation wells, SNE-2, SNE-3 and BEL-1, will be drilled back to back in a program that is estimated to be completed in mid-2016. Both SNE-2 and SNE-3 appraisal wells will be logged, cored and flow tested. The aim of the appraisal program is to progress towards proving a minimum economic field size for the SNE discovery, which FAR estimates to be approximately 200 million barrels of oil. In addition, the BEL-1 well will drill the Bellatrix exploration prospect which will evaluate the untested Buried Hills play. BEL1 will also appraise the northern portion of the SNE oil field (refer Figures 1, 2). For reasons of operational efficiency, the top hole of SNE-3 was drilled prior to the spud of SNE-2 (to a depth of 1,750 metres) by the Ocean Rig Athena (refer ASX announcement 2 Nov 2015). Drilling of the SNE-2 well is expected to take approximately 5 weeks after which the logging and flow testing program will commence. On completion of the operations on SNE-2, SNE-3 will be re-entered and drilling and evaluation will be carried out on SNE-3 before commencement of the BEL-1 well. FAR and its joint venture partners will be operating a tight hole policy, and therefore FAR does not anticipate making any further announcements regarding the drilling program until the SNE-2 well has reached TDVSS.

Drilling commences offshore Senegal

Drilling has started on the appraisal program to evaluate the world class SNE oil discovery offshore Senegal. The three wells SNE-2, SNE-3 and BEL-1 will be drilled back to back in a program that is estimated to be completed in mid-2016. Both SNE-2 and SNE-3 appraisal wells will be logged, cored and flow tested. The aim of the appraisal program is to progress towards proving a minimum economic field size for the SNE discovery, which FAR estimates to be approximately 200 million barrels of oil. In addition the BEL-1 well will also evaluate the Bellatrix prospect which lies on the untested Buried Hills exploration play (refer Figures 1, 2). For reasons of operational efficiency, the top hole of SNE-3 will be drilled first by the Ocean Rig Athena. The rig will be then be mobilised to the SNE-2 well location where SNE-2 will then be drilled to total depth (TD). Operations on the top hole of the SNE-3 well and drilling to total depth (TD) on the SNE-2 well are expected to last approximately 6 weeks after which the coring, logging and flow testing program will commence on SNE-2. On completion of the operations on SNE-2, SNE-3 will be re-entered and drilling and evaluation will be carried out before commencement of the BEL-1 well.

'Ocean Rig Athena' enroute to Senegal

FAR Limited (“FAR”) has announced that the Ocean Rig Athena drillship has commenced mobilisation from Luanda, Angola in preparation for the appraisal and exploration drilling program in FAR’s highly prospective blocks, offshore Senegal. The SNE discovery made in late 2014 will be appraised with the first two wells in the three well drilling program. The firm drilling program will include a coring and testing program, two appraisal wells for SNE (SNE-2 and SNE- 3) plus one shelf exploration well (BEL-1) to further evaluate the shelf area prospectivity. The three wells will be drilled, logged, cored and tested in a program expected to be completed by mid-2016. BEL-1 will be the first exploration well to be drilled in the blocks following the discoveries in the FAN-1 and SNE- 1 wells.

'Ocean Rig Athena' to mobilise to Senegal in the coming days

FAR Limited (“FAR”) and its Senegal joint venture partners have executed contracts for the use of the Ocean Rig Athena drillship for a drilling program in FAR’s highly prospective offshore Senegal Blocks starting in the coming weeks. The Ocean Rig Athena is under long term contract with ConocoPhillips and the ConocoPhillips drilling organisation will play a key role in project managing the drilling program. The drillship is currently in Angola and FAR expects it will commence mobilisation to Senegal in the next few days. The firm drilling program includes three wells including two appraisal wells on the world class SNE-1 oil discovery that will include a coring and testing program, plus one shelf exploration well to further evaluate the shelf area prospectivity. This drilling, logging, coring and testing program is expected to be completed by mid- 2016. The first two wells (SNE-2 and SNE-3) will be drilled to appraise the SNE field and are aimed at progressing towards proving the threshold economic field size which FAR estimates is in the order of 200 mmbbls for a foundation project. The third well (BEL-1) in the drilling program will be the first exploration well to be drilled in the blocks following the discoveries in the FAN-1 and SNE-1 wells. This well will be aimed at building the resource base within tie-back range of a possible future hub development over the SNE field. It will be drilled into the Bellatrix Prospect which has been mapped by FAR to contain 168 mmbbls of oil on a gross, unrisked, prospective resource basis with 25 mmbbls net to FAR. The day rate for drilling for the Senegal joint venture has been adjusted downwards to reflect prevailing market conditions, where day rates have dropped by up to 50% for deep water drilling units offshore Africa. These reduced rates are expected to allow the drilling and testing program to be completed for a heavily reduced cost in comparison to what was envisaged 12 months ago under a higher oil price environment.

Cairn Energy cements Senegal drilling programme

Cairn Energy PLC (“Cairn”) and its joint venture partners have submitted a three year evaluation work plan to the Government of Senegal including an initial programme of three firm and three optional exploration and appraisal wells, with drilling starting in Q4 2015 in Cairn’s new basin play offshore Senegal focused on the acreage around the SNE-1 discovery well. Cairn estimates that the existing two discoveries and the currently identified prospects and leads have an estimated mean risked resource base of more than a billion barrels. The company has selected the Ocean Rig Athena drillship for the drilling programme and is in the final stages of finalising the rig contract. The drillship is currently contracted to ConocoPhillips in Angola until June 2017 and it is not yet clear whether the contract will be a sublet or if Cairn is taking over part of ConocoPhillips’ contract. The firm three well programme is currently planned to include two appraisal wells of the SNE-1 discovery which will core and test the reservoir, as well as one shelf exploration well. There will also be a 2,000km2 3D seismic data acquisition campaign over the Sangomar and Rufisque blocks to help fully map the prospectivity of the contract area. A work programme and budget for the three optional wells will be presented to joint venture partners in Q3 2015. Targets for these wells will be drawn from a combination of further evaluation of the SNE-1 discovery, additional exploration in the shelf region, and exploration in the acreage around FAN-1. Drilling plans for these wells will be subject to ongoing FAN studies and the results of the first three firm wells. Simon Thomson, Chief Executive of Cairn said: “Cairn made two significant discoveries offshore Senegal in 2014 proving a hydrocarbon system in a new and emerging Atlantic Margin Basin. We are excited about the exploration and appraisal opportunity of this world class asset. We have now submitted a three year evaluation work plan to the Government of Senegal which is designed to lay the foundation for a long term multi-field, multi phase exploitation plan. Our focus will be to add value in Senegal within a balanced, well funded company. We are well placed to take advantage of this exciting opportunity as we build on the success of last year.”

Ocean Rig to follow Transocean and Seadrill by applying for MLP listing

Drilling contractor Ocean Rig is preparing to potentially follow in the footsteps of other drilling contractors including Transocean and Seadrill, with the filing of initial paperwork to form a US master limited partnership (“MLP”). Ocean Rig intends to use top rigs on long-term contracts to provide a source of steady cash flow for potential investors. The MLP will be given the name ‘Ocean Rig Partners LP’ and its fleet will initially be made up of a trio of newbuild drillships, ‘Ocean Rig Athena’, ‘Ocean Rig Mylos’ and ‘Ocean Rig Skyros’. The company did not provide financial details on the proposed offering. Earlier this year Transocean successfully created its own MLP, Transocean Partners LLP which owns and operates three rigs working in the US GoM.