Talos books Seadrill rig for deepwater Tornado well

Houston-based oil and gas player Talos Energy has hired a drillship from Seadrill for a well on the Tornado field, located in the U.S. Gulf of Mexico. The well will provide additional production as part of the first-ever deepwater intra-well waterflood project.

Talos Energy started what it said was the first-ever deepwater intra-well waterflood project on its operated Tornado field in the second half of 2020. The oil company holds a 65 per cent working interest in the field.

The oil company informed on Wednesday it had signed a contract with Seadrill for the West Neptune deepwater rig to drill the additional infill well, the Tornado Attic, to build on the waterflood project in the Tornado field.

Talos added that the rig is expected to be on location in the first half of May with drilling activities starting soon thereafter.

The production impact from this well is expected sometime in the third quarter of 2021.

This infill well will provide additional production and have pressure support from the previously completed deepwater intra-well, or ‘dump flood’ waterflood project, which was a first of its kind in the deepwater Gulf of Mexico, Talos explained.

The company expects the waterflood project to augment the field recovery by approximately 25 – 35 MMBoe gross in combination with the planned Tornado Attic well.

Offshore Energy has reached out to Seadrill, seeking further information about the contract duration and the day rate for the West Neptune.

As previously reported, Seadrill in March 2021 confirmed it would lay off 162 offshore workers in the U.S. Gulf of Mexico due to lack of work for the West Neptune rig.

Offshore Energy has also enquired with Seadrill whether the new contract will have any impact on this previous decision. However, the company has yet to respond to our questions.

Bassoe Offshore estimates that the drillship’s day rate for this contract will be $220,000, starting in May and ending in July 2021.

The West Neptune drillship has also recently been in the headlines due to an incident in which one worker died.

Namely, in January 2021, an incident occurred on the West Neptune drillship, which resulted in the fatality of an Allrig employee.

At the time of the incident, the 2014-built drillship was under contract to Kosmos Energy, located in the Gulf of Mexico at Mississippi Canyon Block 727. The drillship was working on the Kodiak II well completion.

According to Seadrill’s fleet status report from the fourth quarter of 2020, the contract with Kosmos was scheduled to expire in March 2021 after which the rig was scheduled to start working for LLOG, also in the Gulf of Mexico.

The contract with LLOG, with a day rate of $202,000, was scheduled to start and end in March 2021.

Seadrill is currently under Chapter 11 bankruptcy protection. At the point of filing, Seadrill had approximately $650 million in cash and did not require debtor-in-possession financing.

The rig owner has recently asked creditors to write off more than 85 per cent of its debts in exchange for a 99 per cent stake in the reorganized company.

Another Seadrill-owned drillship, the West Auriga, previously worked on a deepwater Gulf of Mexico well in which Talos is one of the partners.

Operated by BP with Talos and Chevron as partners, the West Auriga had started working on the Puma West well back in 2019. The well was suspended in January 2020 after setting casing below salt and reaching a true vertical depth of approximately 21,500 feet.

Operations re-started in the fourth quarter of 2020 but, this time, using the Diamond Offshore-owned Ocean BlackHornet drillship. BP revealed in April 2021 that the Puma West well was successfully drilled to a total depth of 23,530 feet.