Carnarvon still waiting on delayed Valaris rig to drill Buffalo well

Australia’s Carnarvon Energy is still waiting for a Valaris-owned rig to arrive at a drilling location in the Timor Sea and drill the Buffalo-10 well, the redevelopment of the Buffalo oil field off Timor-Leste.

Carnarvon, as the operator of the project, is preparing to drill the well that will penetrate the existing oil column – because the field was still producing when it was shut-in in 2004 – and assess the extent of the revised mapped attic oil column.

Carnarvon signed a letter of intent with Valaris for its Valaris JU-107 rig to drill the Buffalo well back in late June 2021, expecting to take possession of the rig around the end of October 2021 upon completion of its current drilling operations. By early September the contract for the rig was formalised and the expectations for the rig’s planned completion of the previous contract changed, moving to between mid-October 2021 and mid-November 2021.

According to Valaris’ latest fleet status report from October 2021, the rig is currently under contract with Jadestone, which will be followed by a contract with Carnarvon. In 2022, the rig is expected to work for Vermilion Oil & Gas from April until June.

Later in September, the rig was expected to start Buffalo drilling operations in early November. However, the rig still has not arrived.

In an update on Tuesday, Carnarvon said that its operations team is ready to receive the Valaris JU-107 jack-up rig to start drilling at the Buffalo-10 well-site. Logistics teams are in place, and all appropriate support services and equipment have been contracted. The last remaining regulatory approvals are expected prior to receipt of the rig.

Carnarvon understands the Valaris JU-107 is in the final stages of its current operations with the previous operator, with rig handover expected within the next two weeks.

Carnarvon Managing Director and CEO, Adrian Cook, said: “The team at Carnarvon are looking forward to receiving the rig and commencing drilling of the Buffalo10 well. We will provide updates as drilling progresses and I look forward to being able to share the Buffalo-10 well results with our shareholders early in the new year.”

Advance Energy, Carnarvon’s partner in the project, confirmed the rig handover is expected within the next two weeks.

The Buffalo field resides in only 30 metres of water with a reservoir depth between 3,200 and 3,300 meters below the sea bed. The previous field proved the existence of very high deliverability reservoir containing high-quality light oil that is expected to sell at a premium to Brent in today’s market. Carnarvon’s mid-case recoverable volume estimate is 31 million barrels (gross, 2C contingent resource).