Norwegian drilling contractor Norshore revealed Thursday that the firm has entered into a firm contract with Sabah Shell Petroleum Company Ltd, Far Frontier Energy Sdn. Bhd. for top hole drilling at the Malikai field offshore Sabah, Malaysia. The contract is a breakthrough for Norshore and is regarded as a new and important cost reducing measure by Shell.
“We have for years seen the potential within the riser-less drilling market and we are very pleased to have secured this first top hole drilling contract for Shell. We believe top hole drilling will contribute to cut the overall drilling costs of field developments. “Norshore Atlantic” has been specifically built to accommodate safe and efficient riser-less drilling operations and we are looking forward to demonstrate the vessel’s capability for Shell at the Malikai field”, says Petter H. Tomren, CEO of Norshore.
The contract with Shell is expected to commence in the middle of August 2014 and will thereafter keep “Norshore Atlantic” on hire for the majority of the remaining year. Norshore experiences strong industry interest for its first vessel and is currently pursuing several contract opportunities for “Norshore Atlantic” following the Shell campaign at Malikai.
Norshore took delivery of its first vessel, “Norshore Atlantic”, early March 2014 from Otto Marine in Singapore. The multipurpose drilling vessel provides innovative and cost efficient riser-less drilling services and will in particular represent substantial cost savings for the oil companies both for field developments (top-hole drilling), as well as in the worldwide increasing marked for plug and abandonment of old wells, as well as all aspects of well intervention. The delivery of “Norshore Atlantic” was partly financed through a $150 million bond loan issued in February 2014.
“Norshore Atlantic” recently commenced work on a light well intervention contract with TAC Pertamina Blue Sky Langsa Ltd in Indonesia. In combination with the contract with Shell this further confirms the strong industry interest for Norshore’s offering and cost efficient solutions.
Furthermore, end of December 2013, the company placed an order for a second vessel, “Norshore Pacific”, at the Yantai CIMC Raffles yard with delivery in the fourth quarter 2016. This contract also holds three optional vessels with attractive payment terms and delivery schedules. As part of its further expansion plans Norshore will do an IPO in Oslo late 2014/early 2015. The long-term plan for Norshore is to have five vessels by 2018.
“We are very pleased with the recent development. “Norshore Atlantic” has been delivered and performs well on its first contract, and we look very much ahead to commence preparations for the Shell contract. In combination with a market where the oil companies are looking for more cost efficient solutions and increasing industry interest, Norshore has an optimistic view on the reminder of 2014 and the time ahead”, says Petter H. Tomren.
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