Tullow Oil exercises 'West Leo' contract option

Seadrill have announced that Tullow Oil has exercised a two year contract option that the company had on the West Leo semi-submersible drilling unit for continued operations in Ghana, at a value of US$450m from May 2016 through to May 2018. The West Leo has worked for Tullow Oil in Ghana since it was delivered to Seadrill and began its current contract in April 2012. The unit is expected to remain in the region whilst it is contracted to the company.

Seadrill sells two semisubs to Seadrill Partners LLC

Seadrill Ltd (Seadrill) has entered into an agreement with Seadrill Partners LLC to sell two working semisubmersible drilling rigs to the recently spun off rig manager. Seadrill Partners LLC will purchase the ‘West Leo’ and ‘West Sirius’ units from Seadrill through a series of purchases, contributions and assumption of debts associated with the two rigs. The implied purchase price of the ‘West Leo’ is US$1.25 billion, whilst the ‘West Sirius’ implied cost is US$1.035 billion. Both assets have good long term contracts attached with the ‘West Leo’ currently contracted to Tullow Oil in Ghana until 2018 and the ‘West Sirius’ is working in the US GoM for BP and is contracted through to July 2019.

Paon-2A well result offshore Côte d’Ivoire

Tullow Oil plc (Tullow) announces that the Paon-2A appraisal well in the CI-103 licence offshore Côte d’Ivoire has determined the down-dip extent of the Paon oil accumulation. The well encountered the water below the oil accumulation discovered at the Paon-1X well and pressure logging has located the likely oil water contact. To minimise the number of appraisal wells, Paon-2A was located 15km south west and approximately 370 metres down-dip of the Autruche light oil discovery made by the Paon-1X well in 2012. The well encountered Upper Cretaceous reservoir sandstones which were water bearing at this location. Pressure data from the Autruche age reservoirs intersected in Paon-2A indicate that the Autruche oil accumulation between this well and Paon-1X has a hydrocarbon column of at least 230 metres. Following completion of logging operations the well will be plugged and abandoned. The Seadrill West Leo dynamically positioned semi-submersible drilled Paon-2A to a final depth of 5,380 metres in water depths of 2,366 metres. Tullow (15% plus a 15% carried interest) operates the CI-103 licence and is partnered by Anadarko Petroleum (55%) and the Societé Nationale d’Opérations Pétrolières de Côte D’Ivoire (Petroci) (5% plus a 10% carried interest).

BP makes a significant deep gas discovery in Egypt's Nile Delta

The Satis discovery is located in the North El Burg Offshore, Nile Delta concession, some 50 kilometres north of Damietta. The well was drilled to a Nile Delta record depth of more than 6,500 metres and is the first significant high-pressure, high-temperature, offshore Oligocene discovery. Satis is a major technical achievement that demonstrates the great potential of the deeper reservoirs within the Nile Delta and will require further appraisal. The parties to the North El Burg offshore concession agreement are: BP, operator (50 per cent) and IEOC, the affiliate of Italy's ENI in Egypt (50 per cent). Satis was drilled by the Constellation II jack-up rig, in a water depth of 90 metres. Andy Inglis, BP's chief executive of Exploration & Production said: "This is a significant discovery, which will underscore our position as a major producer in the growing Egyptian gas market for many years to come."

Vaalco kicks off new development drilling campaign on Etame Marin block

VAALCO Energy, Inc. (VAALCO) today announced the commencement of a new six well drilling campaign offshore Gabon on its Etame Marin block. The development drilling campaign follows the recent on-schedule installation of the Etame platform and the Southeast Etame/North Tchibala ("SEENT") platform. All work on this project was accomplished without a safety or environmental incident. All six wells in the current drilling campaign are development wells and VAALCO has spudded the first well, Etame 8-H, using the contracted Transocean GSF Constellation II jack-up rig. The GSF Constellation II rig will be used to drill two additional development wells (Etame 9-H and 10-H), each targeting the Gamba sand formation in the Etame field, where VAALCO has been producing oil since 2002 utilizing subsea wells. First oil production from the Etame 8-H well is expected in December 2014.The GSF Constellation II will be mobilised to drill three additional development wells from the SEENT platform, beginning with a well to be drilled in the Southeast Etame field where the company drilled a successful exploration well in 2010. The remaining two development wells in the six well campaign will target Dentale sand formations in the North Tchibala field.

GSF Constellation II completes development well on Etame field

VAALCO Energy, Inc. (“Vaalco”) today announced first production from Etame 10-H, the second development well drilled from the newly installed Etame platform, offshore Gabon. The horizontal development well was drilled to a Measured Depth (“MD”) of 3,144 meters while intersecting over 180m of high quality reservoir within an oil-bearing portion of the Gamba Sand. Following completion operations, the well was tested at the rate of approximately 3,200 BOPD on a gross basis with negligible amounts of water and no hydrogen sulfide (“H2S”). The well is currently being produced at approximately 3,000 BOPD. "We are very pleased with the results from the Etame 10-H well and we are eager to continue our current drilling program offshore Gabon," said Steve Guidry, CEO of VAALCO. "VAALCO has produced over 85 million barrels of oil from the Etame Marin block and, with our two new platforms, we are well positioned to continue to deliver a growing production profile through most of 2015." The contracted jack up rig, the GSF Constellation II, is now being mobilized to drill additional development wells from the Southeast Etame/N. Tchibala ("SEENT") platform, beginning with the Southeast Etame 2-H well in the Southeast Etame field, where the Company and its partners drilled a successful exploration well in 2010. Following the mobilization of the jack-up rig to the SEENT platform, VAALCO is planning to conduct an extended well test of the Etame 8-H well, drilled in the fourth quarter of 2014, to confirm and quantify the presence of H2S, which was detected during the initial 17 hour flow test. The well test is expected to occur later in the first quarter of 2015.

Vaalco announces first production from Etame 12-H well

VAALCO Energy, Inc. (“Vaalco”) today announced first production from Etame 12-H, a development well drilled from the Etame platform offshore Gabon. Etame 12-H was drilled to a measured depth of approximately 3,450 meters targeting the recently discovered, untapped lower lobe of the Gamba reservoir. Following completion operations, the well was brought online at the rate of approximately 2,000 BOPD on a gross basis (approximately 500 BOPD net to VAALCO) with no indication of hydrogen sulfide (H2S). The well is currently being temporarily constrained at the above production level while it is being optimized for efficiency. The Etame 12-H is an offset well to the Etame 10-H well which began producing in February 2015, at a rate of 3,000 BOPD, and was the first oil production from the recently commissioned Etame platform. "The offshore Gabon drilling campaign that we began last year has so far resulted in increased production of approximately 5,000 gross barrels per day of sweet crude," said Steve Guidry, CEO of VAALCO. "We are pleased with the encouraging results from the Etame 12-H well, and are optimistic about the opportunities we have to expand production offshore Gabon as part of our ongoing development campaign." The contracted jack up rig, the Transocean "Constellation II", is now being mobilized to drill additional development wells from the Southeast Etame/N. Tchibala ("SEENT") platform, beginning with the 2-H well in the Southeast Etame field, where the Company and its partners drilled a successful exploration well in 2010. Following the drilling of the Southeast Etame 2-H well, the rig will drill the North Tchibala 1-H well, the first of VAALCO's wells offshore Gabon to be drilled targeting the Dentale formation. No H2S is expected from the Southeast Etame/N. Tchibala fields.

VAALCO Energy Announces Second Successful Well Drilled To The Dentale Formation

VAALCO Energy, Inc. (NYSE: EGY) today announced that the North Tchibala 2-H well, the second development well drilled by VAALCO in the North Tchibala field, was brought online at a stabilized rate of approximately 500 gross barrels of oil per day (BOPD), or 122 BOPD net revenue interest to VAALCO. The well was drilled to a measured depth of 16,476 feet and encountered good quality sands in the Dentale D-18/19 reservoir. The well came on production flowing naturally with no H2S and water free. Based on production tests in nearby exploration wells, the quality of the reservoir would indicate the potential for a higher flow rate than has been achieved thus far. VAALCO is gathering diagnostic data to assess the productive capacity of the North Tchibala 2-H well and to determine if there is remedial work that might increase the flow rate from the well. While the Dentale formation is productive in onshore Gabon fields, the North Tchibala field represents the first Dentale production developed in the offshore waters of Gabon. The first North Tchibala producer, North Tchibala 1-H, targeted the shallower Dentale D-9 formation at approximately 11,200 feet measured depth and was placed on production during the third quarter of 2015. The North Tchibala 1-H well initially produced at a sustained rate of 3,000 BOPD flowing naturally for six weeks with minimal pressure depletion. In late October, the Company observed a decline in bottomhole pressure accompanied by an increase in gas production rates. The well was choked back to approximately 1,500 BOPD and bottomhole pressure has now stabilized. Production continues to remain at that level, which is still at initial expectations for the well. VAALCO will continue to monitor both Dentale wells and take appropriate actions to optimize long term production and reservoir performance. The North Tchibala 2-H is the third successful well drilled and placed on production at VAALCO's new Southeast Etame/North Tchibala (SEENT) platform located in approximately 260 feet of water offshore Gabon. VAALCO is the operator of the Etame Marin permit area and owns a 28.1% working interest and a 24.4% net revenue interest. The Transocean Constellation II jackup rig has mobilized to the nearby Avouma/South Tchibala platform to conduct workover operations to replace electrical submersible pumps (ESPs) on three existing production wells, two of which are off production. Sea conditions have improved allowing the safe movement of the rig. Steve Guidry, VAALCO's Chairman and CEO commented, "I am pleased to announce that the North Tchibala 2-H well encountered very good quality reservoir. As a result, we are further encouraged about the long term upside potential for the Dentale formation on our Etame Marin acreage, but it will take time to monitor the ongoing performance of the first two wells and to test other areas of our concession with additional wells in the future. While no more wells are planned for the SEENT platform in the near term, we are evaluating the drilling of a development well at the Etame platform in early 2016 following our three-well workover program. The Etame development well would target the Gamba formation as well as test the Dentale reservoir that we believe could exist at deeper depths in that area."

Aquadrill Announces Sale of the Leo

Aquadrill LLC ("Aquadrill” or the “Company") has entered into an agreement for the sale of a semisubmersible drilling unit, the “Leo”, with a subsidiary of BW Energy (the “Buyers”) for USD 14 million. The rig is expected to be repurposed as a Floating Production Unit, thereby removing the rig from the drilling market.