Vantage jack-up released as Tower changes rig for Cameroon well
UK-based Tower Resources has decided to change the rig which will be used to drill its well on the Thali block located in the Rio del Rey Basin offshore Cameroon. As a result, Tower has released Vantage’s Topaz Driller jack-up in favor of a COSL-owned rig.
Tower initially planned to drill the NJOM3 well in May, using the Vantage Drilling-owned Topaz Driller jack-up rig. Come May and Tower re-scheduled the well drilling for July to allow sufficient time for the additional site preparation work to be completed.
In an update in June, Tower said the well would be spud in 3Q 2019.
As previously reported in May, the company received additional data from the original Total wells at NJOM1 and NJOM2, which indicated that further site preparation work would be required before the drilling rig for the NJOM-3 well is moved to site.
Tower said in an update on Wednesday that the most suitable vessel to undertake this site preparation work is now en route to West Africa with the expectation that this work can be completed during September 2019.
The company had previously agreed with Vantage to defer the beginning of its drilling contract in respect of the Topaz Driller until after Vantage’s current charter to another oil company was completed.
However, in the past few weeks a former sister rig to the Topaz Driller, the COSL Seeker, has become available in Cameroon after completing recent work for Addax. Given the difficulty in matching up the schedule of the Topaz Driller with availability of the site survey data, the company on Tuesday signed a Letter of Intent (LOI) to use the COSL Seeker rig to drill NJOM-3 instead of the Topaz Driller, and has released the Topaz Driller.
Tower said that the dayrate and other terms of the COSL agreement are similar to the Vantage agreement, and while there may be some additional costs for the mobilization of test equipment to the COSL Seeker on the current schedule, the company also anticipates significant savings in the cost of rig mobilization and demobilization.
In the aggregate, the company does not presently anticipate a material change in the total cost of the well as a result of this change of rig.
The company has notified the Societe Nationale de Hydrocarbures (SNH) and the Government of Cameroon (MINMIDT) of the changes to the well schedule, and does not anticipate any difficulty in proceeding with the well, despite the fact that the extension to the first Exploration Period of the company’s Production Sharing Contract (PSC) expires on September 14, 2019, since the well remains an operation in progress.
The NJOM3 well will be drilled to a total depth of 1,100 meters intersecting at least three reservoir zones already identified by the NJOM1B and NJOM2 discovery wells drilled on the Njonji structure by the previous operator Total.
The well is designed to confirm the greater reservoir thicknesses observed on the reprocessed 3D seismic in the up-dip area of the structure, and also evaluate additional reservoirs that were not present in the areas where Total’s wells are located.
The NJOM3 well is designed to supplement Total’s well data with a suite of measurement and logging tools and drill stem test (DST) flows to surface. The company’s intention is then to suspend the well with a view to subsequent completion as one of four initial production wells on the structure.
This first phase of development envisaged by the Reserve Report, aiming to exploit the 2C contingent resources (Pmean 18 million barrels oil, gross) already identified in the structure, aims to provide significant production to Tower in 2020.
Farm-out talks in progress
In respect of well financing, the company said it is continuing farm-out discussions with multiple parties who are currently undertaking due diligence.
The company is hoping to bring at least one of these discussions to a conclusion in the near future, bearing in mind both the operational schedule and also that the company’s bridging loan facility agreement falls due for repayment at the end of August, subject to a grace period until September 30, 2019.
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