Atwood Oceanics announced that Vicksburg jackup (owned and operated by our wholly-owned subsidiary, Atwood Oceanics Pacific Limited) has been awarded a contract by NuCoastal (Thailand) Limited to drill offshore Thailand under a firm program of three months with an option to extend the program to six months. The option to extend the program to six months must be exercised no later than 30 days after commencement of the contract.
NuCoastal plans to utilize the Vicksburg in developing its properties offshore Thailand. Current drilling plans include further development drilling on the Songkhla Lower Oligocene formation, development of the Songkhla B prospect and the initial development of the Bua Ban field. The program also includes the drilling of a water injector on the Songkhla Lower Oligocene and workovers of existing producing wells.
The Company expects the Vicksburg to be on location in late August 2009.
If the duration of the drilling program is for the three months firm period only, the operating dayrate will be $95,000; however, if the drilling program extends for six months the operating dayrate will be adjusted to $90,000 for the entire period.
The Vicksburg is currently undergoing a life enhancing upgrade at a shipyard in Thailand which is expected to be completed on or before August 28, 2009. Immediately upon the rig completing this upgrade, it will commence working under the contract with NuCoastal.
Randy Bartley, President and Chief Executive Officer of Coastal Energy commented, "This is the first step toward the commencement of our 2009 drilling program. Coastal is excited to return to the development of its offshore assets. We expect further development of our proven reserves at Songkhla to bolster current offshore production rates, which averaged 7,000 bopd for the second quarter with total production for the second quarter averaging approximately 9,000 boepd. The Songkhla B prospect also offers promising potential to add reserves and production in close proximity to our existing infrastructure."
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