Ensco Rigs Win Contracts for Work in US Gulf, Offshore Angola

Marathon Oil Corporation awarded a five-month contract to Ensco 8502 (UDW semisub) for work from mid-September through mid-February 2014 at a day rate in the $530,000 range, drilling contractor Ensco Plc reported Monday in its July 2013 fleet status update.

Ensco 8502 currently is working for LLOG in the U.S. Gulf, where the rig is drilling a well at the Neidermeyer North Field in Mississippi Canyon Block 208 in 4,645 feet of water, according to Rigzone’s RigLogix database.

The rig will continue working for LLOG through mid-September at a day rate in the low $500,000 range before moving on to Marathon. After its contract with Marathon, the rig will go to Stone Energy for a contract through mid-September at a day rate in the low $530,000 range, Ensco said.

Ensco also reported that its Ensco DS-2 (UDW drillship) received a contract extension from Total S.A. from mid-September 2013 to mid-September 2014 at a day rate in the high $430,000 range, according to RigLogix. The rig has been working for Total offshore Angola at a contract day rate in the low $480,000s.

The lower than anticipated day rate for the Ensco DS-2, a fleet status report that disclosed a moderate amount of incremental downtime, and the delay of a scheduled contract start for a newbuild jackup from first quarter 2014 to second quarter 2014 made for a “fairly negative” fleet status report.

Barclays Capital analyst James C. West noted that the substantial day rate dip for the Ensco DS-2 is concerning on two fronts: a possible early indication that non newbuild ultra-deepwater rates are in the early stages of collapsing, and that it implies further delays and impediments are developing in Angola, a key deepwater basin.

For now, Barclays attributes the Ensco DS-2 day rate more to regional and company-specific issues.

“The current ultra-deepwater fleet continues to remain sold out; however, questions are growing about potential day rate softness as the market looks to absorb over 30 uncontracted newbuilds set for delivery in the coming two years,” West said in a statement.


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