As agreed between AED Oil Limited and SEAP, SEAP will commence receiving the bareboat hire rate of approximately US $160,000 per day from June 5. All operating costs incurred after June 5 will be passed through to AED.
AED has reported that the Puffin 8 production well has been completed and flow tested at a maximum flow rate of 11660 bpd. The Puffin Field is located offshore Australia. The original contract between SEAP and AED included production initially from one well only, the Puffin 7. Based on the results from Puffin 8, AED has decided to modify the subsea installation and the FPSO to be able to produce from two wells from initial start of production "first oil". Production from both the Puffin 7 and Puffin 8 wells will give additional security for production and significantly reduce project risk.
The conversion of the Front Puffin is ahead of schedule and on budget compared with the information given in the private placement material. SEAP has demonstrated to AED that the vessel would have been ready to start production at the field in the beginning of June and AED has agreed that June 5th will be the deemed delivery date, more than one month ahead of the date previously indicated by SEAP in its private placement material.
However due to the fact that AED has decided to produce from two wells, SEAP has been instructed by AED, and agreed, to delay the FPSO's departure from Singapore to correspond with AED's revised installation program. The Front Puffin will stay in Singapore until the end of June.
With the successful completion of the Front Puffin project, SEAP is in the process of strengthening its organization with the addition of key senior personnel and by building marketing presence in its key target markets. Per Bjorn Habbestad has been employed as COO for Sea Production Management AS. Mr. Habbestad was SVP of Aibel, responsible for Aibel's international business, including the facilities management business which operates FPSOs. Petter Hoie will relocate to Singapore and be responsible for business development and commercial management for SE Asia. This will be a key strategic market for SEAP.
SEAP is actively developing new projects and actively developing opportunities for consolidation in the industry. SEAP view the outlook for the FSO and FPSO markets as strong and SEAP should be well positioned for growth in such markets going forward.
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