With rig already secured, Eni hopes to spud Mexican well in late 2022

Italian oil and gas company Eni will start its drilling operations on an exploration well located in Block 7 in the Sureste Basin offshore Mexico in late 2022, using a Valaris-owned semi-submersible. The same rig drilled a different well in this block a couple of years ago but failed to find hydrocarbons.

Following approval of the modified exploration plan and budget, drilling of the Yatzil prospect located on Block 7 in Mexico is expected to begin in 4Q 2022.

This was shared in an update on Tuesday by Eni’s partner in the block with a 30 per cent interest, Capricorn Energy, for whom Yatzil is a final commitment exploration well in Mexico.

Eni’s other partner in the block is Mexico’s independent E&P company, Citla Energy. The partnership secured the block in 2017 as part of Mexican Round 2.1 under production sharing contracts with a duration of up to 40 years.

Eni has already drilled an exploration well on Block 7, named Ehecatl-1. The well was located 65 kilometres offshore in a water depth of 426 metres and reached a total depth of 4,451 metres. It did not find hydrocarbons and it was permanently plugged and abandoned in May 2020.

Now, Eni is preparing for more drilling in Mexican waters and, recently, it has awarded a three-well contract in Mexico to the Valaris-owned DPS-5 rig. The contract is expected to begin in the fourth quarter of 2022 and has an estimated duration of 240 days.

Offshore Energy has reached out to Eni, seeking to confirm that this rig will be used to drill the Yatzil well. A spokesperson for Eni confirmed that the Valaris rig will drill the well at the end of the fourth quarter, depending on the rig availability. The same rig was also used to drill the Ehecatl-1 well in 2020.

The operating day rate for the rig under this new contract with Eni is $313,500, plus a mobilization fee of approximately $1.2 million.

The 2012-built DPS-5 rig, from the 8500 Series, worked for Kosmos in the U.S. Gulf of Mexico from March until August 2022 when it was supposed to start working for Apache under a deal expected to end this month after which it is under contract with Murphy in the Gulf until October. Once this is done, the rig will move on to work in Mexico, also for Murphy, until December. It is expected that, after this contract, the rig will work for Eni. The end of this contract is scheduled for August 2023.

According to the latest AIS data, the rig arrived at Apache’s East Breaks 597 (EB-597) area in the Gulf of Mexico on Tuesday, 6 September 2022.