North Sea Rig Utilization Soars Above Global Average
North Sea offshore drilling activities are faring much better than worldwide operations. Total average utilization for region's mobile offshore drilling fleet is 92 percent, which compares quite favorably to the global average of 83 percent. The harsh environment along with a higher degree of regulatory oversight (especially in Norwegian waters) relative to the rest of the globe contributes to a limited participation by offshore drillers.
Dividing the region up into two parts (Norway in the North and the United Kingdom/Netherlands in the South) provides a clearer picture on average dayrates. In the southern section the going rate for a jackup is in the low-$120 k/day range. Conversely, jackup rigs to the north are averaging in the low-$310s. Both locales compare favorably to the worldwide jackup average, which is in the low-$100s.
A similar disparity due to capabilities and harsh environment demands exists for floaters as well. A floater operating in the southern waters of the North Sea commands an average dayrate in the low-$300s, while floaters to the north average in the high-$430s. We would note that the majority of the rigs servicing operators in the North Sea are suited for mid-water duties (i.e. less than 4000'). The global mid-water floater average is in the mid-$290s.
RECENT NEWS FROM THE REGION
Lotos Taps Maersk Guardian for One Well – Lotos has hired the Maersk Guardian (350' ILC) for a one-well contract offshore Norway. The rig will be used to drill Lotos' Skagen exploration well in PL 498 during 3Q12. The contract has an expected duration of 55 days at a rate in the low-$310s.
Ithaca Energy Hires WilHunter for Hurricane Appraisal – Ithaca Energy has contracted the WilHunter (mid-water semisub) to drill and test an appraisal well on its Hurricane discovery in Block 29/10b in the UK North Sea. The contract, which is valued at US $15.7 million, will start upon completion of the rig's current contract with MPX Ltd.
Noble Adds North Sea Backlog – Noble has added additional backlog to several North Sea rigs. The Noble Lynda Bossler, Noble Ronald Hoope and the Noble Piet van Ede have each received contracts from GDF Suez at rates in the mid-$110s. The Noble Ton van Langeveld has received a 5-month extension form Maersk Oil at the same rate (mid-$240s).
Centrica to Sidetrack Butch Discovery – Centrica Norge has made an oil discovery on its Butch prospect in PL 405 offshore Norway, encountering approximately 50 meters of net oil pay in the Upper Jurassic reservoir. The Maersk Guardian (350' ILC) will now drill a down-dip sidetrack to appraise further down on the large salt induced structure.
GDF Suez Exercises Option for GSF Galaxy – GDF Suez has exercised its option for the GSF Galaxy II (400' ILC). The dayrate for the three-well option is in the low-$190s, which is up from the rig's current dayrate in the high-$160s. The rig is still on the first well of the original firm contract. The prospect, Faraday, is an HPHT well targeting approximately 750 billion cubic feet of natural gas.
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