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Apache Corp and French rival Total have formed a joint venture to develop a project off Suriname, the companies said, in a deal that gives the U.S. oil and gas producer a cash injection.
Apache’s Suriname offshore prospect, near the border with South America’s newest oil giant, Guyana, is a long-shot for the U.S. company, with the Total agreement providing financing to continue exploration.
Apache reported this month it had reached its target depth at its first Suriname well but said only that it would drill deeper, knocking 17% off its shares in two days as investors took the news as a sign the well had no commercially viable oil.
Apache shares rose 17% to $26.53 on Monday on news of the agreement. With the gain, the shares are about flat year-to-date, compared with a 28% increase in the S&P 500 index of major U.S. stocks.
Exploration off Suriname is being watched closely as it is just over the border from Exxon Mobil and Hess Corp’s giant fields off the coast of Guyana estimated to hold more than 6 billion barrels of oil. Total has non-operating interests in two Guyana projects.
Total said it would give Apache a bonus of $100 million when the deal closes, reimburse half of Apache’s costs to date for its first three exploration wells, and could pay more depending on further developments.
Apache said it would receive $5 billion of cash carry on its first $7.5 billion of appraisal and development capital along with other considerations. Total eventually would become the operator of the wells.
The deal reduces Apache’s risk if the wells prove uneconomic, according to researchers at Cowen & Co, but “significantly reduces upside value potential.â€
The U.S. oil producer has largely pulled back internationally to focus on its much-hyped Alpine High field in a remote corner of the Permian Shale basin, the top U.S. shale formation. However, Alpine High has been a disappointment, requiring enormous investment in pipeline infrastructure and delivering mostly natural gas at a time when prices are their lowest in more than two decades.
Apache posted a $577 million loss in the first nine months of this year as it pulled back at Alpine High.
Under the Suriname deal, Apache and Total will each hold a 50% working interest in Block 58.
Apache will operate the first three exploration wells in the block, including the Maka Central-1 well, and subsequently transfer operations to Total.
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Valaris Limited announced new contracts awarded subsequent to issuing the Company’s most recent fleet status report on February 21, 2023. Three-year contract with Petrobras for drillship VALARIS DS-8. The rig will be reactivated for this contract. The total contract value is approximately $500 million, including a $30 million mobilization fee. 100-day contract with a TotalEnergies affiliate for drillship VALARIS DS-12. The contract is expected to commence in second quarter 2023. 70-day contract with Beach Energy offshore New Zealand for heavy duty modern jackup VALARIS 107. The contract is expected to commence in third quarter 2023. The total contract value is approximately $26 million. President and Chief Executive Officer Anton Dibowitz said, “We are particularly pleased to have secured the award for preservation stacked drillship VALARIS DS-8, for a contract that is expected to generate a meaningful return over the firm contract term, and we remain focused on exercising our operational leverage in a disciplined manner. This most recent award represents the sixth contract awarded to one of our high-quality stacked floaters since mid-2021, and speaks volumes about our demonstrated track record of project execution when reactivating rigs.” Dibowitz added, “Following the reactivation of VALARIS DS-17 and DS-8, we will have ten floaters working across the golden triangle, including four drillships in Brazil, a market where we expect to see continued growth over the next several years.” Updated Guidance As a result of the contract awarded to VALARIS DS-8, which will require the rig to be reactivated from preservation stack, we are updating our first quarter 2023 and full-year 2023 guidance provided on our fourth quarter 2022 conference call on February 21, 2023. First Quarter 2023 Contract drilling expense is expected to increase by approximately $5 million to $385 million to $395 million. Adjusted EBITDA is expected to decrease by approximately $5 million to negative $5 million to breakeven. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $25 million to $30 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Full-Year 2023 Revenues are anticipated to be $1.8 billion to $1.9 billion, unchanged from the guidance provided on our fourth quarter 2022 conference call. Contract drilling expense is expected to increase by approximately $60 million to $1.49 billion to $1.59 billion. Adjusted EBITDA is expected to decrease by approximately $60 million to $180 million to $220 million. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $280 million to $320 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Capital expenditures are expected to increase by $60 million to $320 million to $360 million. Source: Valaris Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Seadrill Limited announced that the West Neptune has executed approximately six months of term extensions with LLOG Exploration Offshore, L.L.C in the US Gulf of Mexico. The extensions will commence in direct continuation of the existing term, and will keep the rig busy until Q3 2024, furthering Seadrill and LLOG’s long-term association. Total contract value for the extension is approximately $79 million. Source: Seadrill Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Semisub rig owner Dolphin Drilling has inked a new contract with Peak Petroleum in Nigeria for its 1974-built Blackford Dolphin. The firm contract, which follows the letter of award in January, gives the Euronext Growth-listed owner of three rigs the potential to extend the unit’s backlog by a minimum of 120 days and up to 485 days. The deal adds to and will be a direct continuation of the previously announced 12-month contract with General Hydrocarbon Limited (GHL). Øystein Stray Spetalen-backed company said the effective dayrate associated with the minimum firm period of the contract is $325,000, including the mobilisation fee. “The final award of the contract for Blackford Dolphin shows the opportunities in Nigeria at a strong dayrate, in addition to building on the backlog for the rig. It also underlines the attractiveness of our assets, and we look forward to returning to revenue-generating operations in 2023,” noted Bjørnar Iversen, CEO of Dolphin Drilling. Source: Dolphin Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
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