Join our daily newsletter At The Bell to receive exclusive market insights
- Karoon Energy (KAR) has contracted Maersk Drilling’s rig for a workover program at the Baúna oil field in Brazil
- The contract is valued at around US$34 million (roughly A$43.6 million) and includes rig modifications and a mobilisation fee
- The program will include work on four wells to support a production increase of between 5000 and 10,000 barrels of oil per day
- Additionally, Karoon has the right to use the rig for work at the nearby Patola oil field
- Unfortunately, the rig is currently preoccupied in the Caribbean and won’t be mobilised to Baúna until the first half of next year
- Karoon is up a slight 0.85 per cent and shares are trading at $1.19
Karoon Energy (KAR) has contracted Maersk Drilling’s Maersk Developer rig for a workover program at the Baúna oil field in the Santos basin of Brazil.
The contract is valued at around US$34 million (roughly A$43.6 million) and includes rig modifications and a mobilisation fee.
The workover program will involve four wells and is targeting a production increase of 5000 to 10,000 barrels of oil per day.
Specifically, Karoon will replace downhole pumps in two wells, install a gas lift in one well and re-open an oil zone in the fourth well.
“We are delighted to have signed this contract with Maersk Drilling, a global leader in offshore drilling, with one of the youngest and most advanced rig fleets in the industry,” CEO and Managing Director Dr Julian Fowles said.
Pleasingly, Karoon has the option to retain the rig for the potential development of the nearby Patola oil field. This will include drilling two wells and the development has the potential to produce more than 10,000 barrels of oil per day.
“The arrival of the Maersk Developer rig will enable Karoon to implement a workover program at Baúna, which is expected to add materially to our production and is an important step in getting a final investment decision for the Patola Development,” he added.
The rig is located in the Caribbean and won’t be mobilised to Baúna until the first half of next year as a drilling program is currently underway.
Karoon is up a slight 0.85 per cent and shares are trading at $1.19 at 2:16 pm AEST.
