Maersk Discoverer rig - Maersk Drilling

CGX picks Maersk rig for Guyana well

Maersk Drilling has been awarded a contract by CGX Resources, operator and joint venture partner with Frontera Energy, for the semi-submersible rig Maersk Discoverer for exploration drilling in the Corentyne Block off Guyana.

Maersk Discoverer rig; Source: Maersk Drilling

Frontera Energy and CGX Energy, joint venture partners in the Petroleum Prospecting License for the Corentyne block, separately announced on Thursday that CGX Resources has entered into an agreement with Maersk Drilling for the provision of the Maersk Discoverer rig and associated services to drill the Joint Venture’s Kawa-1 well.

The Joint Venture is targeting an early third quarter spud for the Kawa-1 well.

Related Article

The primary target for the Kawa -1 well is a Santonian age, stratigraphic trap, interpreted to be analogous to the discoveries immediately to the east on Block 58 in Suriname.

The Kawa-1 well is anticipated to be drilled to a total depth of approximately 6,500 meters in a water depth of approximately 370 meters.

The contract is for one firm well on the Corentyne block and one optional well on the Demerara block, scheduled to start in the third quarter of 2021 in direct continuation of the rig’s current contract.

The optional well has an estimated duration of 40 days. Maersk Drilling and CGX are in discussions to add additional services and performance incentives to the scope.

The Maersk Discoverer is a 6th generation semi-submersible drilling unit capable of operating in 3,000 meters water depth.

Morten Kelstrup, COO of Maersk Drilling, noted it is the company’s first time to work with CGX.

He added: “The D-rig series is particularly well suited to fill special niches around the Americas with its versatile capabilities of both being able to work in a moored and a dynamically-positioned mode.

“With this contract, Maersk Discoverer is fully booked throughout 2021 allowing us to continue to build and leverage the experience of the crew as well as the special technical characteristics of the rig”.

In conjunction with the drilling contract between CGX Resources and Maersk, Frontera anticipates entering into a separate deed of guarantee with Maersk.

The deed is for certain obligations in connection with the day rates under the drilling contract on behalf of CGX Resources, up to a maximum of $25 million, subject to a sliding scale mechanism in connection with payments made under the drilling contract.

Frontera and CGX anticipate entering into an agreement pursuant to which all amounts drawn under the deed that are attributed to CGX Resources’ share of the Joint Venture costs, will be guaranteed by CGX.

Earlier this week, Frontera Energy and CGX Energy entered into a term sheet for a $19 million loan that will enable CGX to continue to finance its share of costs related to the Corentyne, Demerara, and Berbice blocks off Guyana.

The loan to CGX will be available for drawdown in tranches on a non-revolving basis until the earlier of 31 October 2021 or the date on which CGX enters a binding transaction that provides funds to repay the amounts outstanding under the loan.