Neptune Energy to keep Deepsea Yantai rig until late 2021

Oil and gas company Neptune Energy has extended the contract for the Deepsea Yantai semi-submersible offshore drilling rig until late 2021.

The Deepsea
Yantai rig – formerly known as the Beacon Atlantic – is owned by China’s CIMC
and managed by the Norwegian drilling contractor Odfjell Drilling.

The rig was used this summer to make the Dugong discovery. In August, Neptune claimed that it was the largest oil discovery in Norway so far this year.

According to
the company, the volumes are estimated to be in the range of 40 – 120 million
barrels of oil equivalent (boe).

The manager
of the rig, Odfjell Drilling said that Neptune Energy extended the contract for
the Deepsea Yantai with three additional wells taking the rig to late 2021.

According to
Odfjell, the rig will conduct the second drilling phase of Neptune Energy’s
Fenja field development project. Also, the parties have agreed to increase the
number of optional wells from the remaining five up to ten optional wells.

Simen Lieungh, CEO of Odfjell Drilling, said: “The extension of the Deepsea Yantai is an acknowledgement of the excellent work performed by our team in the mobilisation, start-up and operation of the Deepsea Yantai”.

Neptune Energy initially hired the Deepsea Yantai under its original name, the Beacon Atlantic, in March 2019. Namely, the oil and gas firm chartered the rig from CIMC Raffles and drilling operations started in the fourth quarter of 2019.

The
estimated duration of the firm program of six wells under the deal was for 400
days. Neptune also had options to extend the contract for up to 10 more wells.

As for the
rig, the Deepsea Yantai is of GM4D design and is capable of harsh environment
operation and is winterized for operation in Arctic areas.

It is worth
noting that CIMC Raffles and Odfjell Drilling signed a four-year management
agreement last year, under which Odfjell Drilling would manage and operate the
rig.

The driller also
has the exclusive right to buy the rig and will have a right of first refusal
on any offer to purchase the unit following the exclusivity period.