ACOR's Australian Offshore Well Drilling Program Kicks off in March

Australian-Canadian Oil Royalties Ltd. (ACOR) reported that the drilling of the Coelacanth well on ACOR's ORRI under VIC/P45 is expected to commence drilling by the first week of March.

The well will be drilled by the brand new West Triton jack-up rig. The West Triton rig has recently arrived all the way from Singapore. After loading up with supplies and equipment on Feb 9 the rig was towed to the location of the first well in the rig's multi-well drilling program.

The Coelacanth structure on ACOR's VIC/P45 is the second well in the West Triton multi-well drilling program. The same drilling rig (West Triton) will also drill on ACOR's ORRI under VIC/P54 and VIC/P53 as well.

With supply tight and demand high, offshore explorers are having to be innovative to get access to offshore drilling rigs. Rig owners are calling the shots. Rentals have tripled since 2005 for new rig contracts stretching up to 2012.

Worldwide, 3233 oil and gas drilling rigs were active at the end of last year, up 27% from a year earlier, according to a count by global services company Baker Hughes.

An offshore jack-up rig cost an average of $US130,000 ($A165,000) a day in March, compared to a worldwide average of $99,000 a year ago, according to Rigzone.

Rig-sharing agreements are becoming increasingly popular as a way around this dilemma for junior and mid-cap explorers with only one or two wells each to drill.

One Melbourne-based company, recognizing a gap in the market, has even put its own twist on the concept.

Australian Drilling Associates, a firm that specializes in one-stop offshore drilling project management, has brought together six explorers in a deal that will see the newly constructed West Triton rig drilling a minimum of eleven wells, of which four wells will be located on three of ACOR's ORRI's under VIC/P45, VIC/P54 and VIC/P53.

On VIC/P45, the well will target the Coelacanth prospect with estimated reserves of approximately 64,000,000 barrels of oil or approximately $6,400,000,000 at current crude oil prices.

On VIC/P54, the operator will drill the development well Longtom 4 to properly development the field and is seeking to possibly increase the already proven reserves of 438 BCF of gas and 4,000,000 barrels of condensate in the Longtom Gas Field or approximately $5,700,000,000 at current crude oil & gas prices.

On VIC/P53 the well will target the Bazzard structure with estimated reserves of approximately 35,000,000 barrels of oil or approximately $3,500,000,000 at current crude oil prices.

VIC/P45, VIC/P54 and VIC/P53 are located in the prolific Gippsland Basin in the offshore Australian waters of the Bass Strait.

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