Ocean Rig Poseidon rig starts Eni work in Angola. Rig inquiries on the rise

Offshore driller Ocean Rig has informed that its drillship Ocean Rig Poseidon has been hired by Eni, and has started drilling in Angola.

The drillship recently arrived in Angola following a drilling campaign in Namibia where it had drilled for Chariot and Tullow, where both wells came up dry.

According to Ocean Rig, the contract with Chariot ended on October 15, and the rig has now started its contract with Eni for drilling offshore Angola.

“This contract has been entered into following the previously announced LOI. Eni has exercised its two optional wells making it a firm four-well program that is expected to be completed in the second quarter of 2019,” Ocean Rig said.

The dayrate for the drillship contract with Eni was not disclosed.

This is not the first Eni in is using the Ocean Rig Poseidon. The Italian oil company used the rig in Angola back in 2014, when it struck oil at the Ochigufu exploration prospect in the block 15/06. Ochigufu was brought on stream in March this year, connected to the Sangos production system and from there to the FPSO N’Goma.

Eight rigs stacked

Ocean Rig, expected to be acquired by Transocean soon, currently has three rigs on contract: Ocean Rig Poseidon with Eni, Ocean Rig Skyros with Total, and Leiv Eiriksson semi-submersible drilling rig with Lundin in Norway.

Ocean Rig on Wednesday said Lundin had in October declared its eighth option to extend the existing contract of the Leiv Eiriksson, which is now expected to have firm employment secured until the first quarter of 2019.

“Should Lundin exercise its remaining four one-well options, the drilling unit could potentially be employed until the second half of 2019,” Ocean Rig said.

Apart from the three rigs on contract, the drilling contractor has eight rigs without a contract of which two – the Ocean Rig Mykonos and the Ocean Rig Corcovado – are in Las Palmas, Spain, where they remain “ready to drill.”

Six other rigs the Eirik Raude, the Ocean Rig Olympia, the Ocean Rig Apollo, the Ocean Rig Mylos, the Ocean Rig Paros and the Ocean Rig Athena, are currently cold stacked in Greece.

Offshore picking up

Despite most the company’s rigs currently being without a contract, Ocean Rig CEO Pankaj Khanna is optimistic about the signals the driller is receiving from the potential clients where the driller sees an increase in inquiries for rigs at levels not seen since 2013, before the oil market downturn.

He said: “The market has been developing as projected with an increasing level of demand that has not been experienced since 2013, before the collapse in oil prices. Given the strong positive cashflow of our customers, we expect new and suspended offshore projects to achieve FID in 2019 and beyond that may lead in higher demand for drilling in the coming years and a recovery in rig day rates.”

He also commented on the expected merger between Ocean Rig and Transocean: “As we have previously announced, our and Transocean’s Special Meetings where each of our respective shareholders will vote on our proposed merger with Transocean are each scheduled for November 29, 2018. Assuming a positive vote by both our and Transocean’s shareholders, we expect the merger to close in December.”

The company on Tuesday reported net loss of $31.5 million for the three-month period ended September 30, 2018, as compared to a net loss of $234.0 million

Revenues decreased by $126.8 million to $74.1 million for the three-month period ended September 30, 2018, as compared to $200.9 million for the three-month period ended September 30, 2017 due to the conclusion of the respective drilling contracts of the drilling units Ocean Rig Corcovado and Ocean Rig Mykonos, and decreased operating days of the drilling unit Ocean Rig Poseidon.

Worth noting, last year’s 3Q revenues had been boosted as a result of termination fees received upon the early termination relating to the contract of the drilling unit Ocean Rig Apollo.

Offshore Energy Today Staff