Deepwater drilling contractor Transocean has secured a $252 million firm contract at the Shenandoah field in the U.S. Gulf of Mexico for its newbuild ultra-deepwater drillship, the Deepwater Atlas, including a mobilization fee of $30 million.
"This award results from the final investment decision of [BOE Exploration & Production LLC (“BOE”)] and the Shenandoah working interest owners to sanction the previously announced Shenandoah project in the U.S. Gulf of Mexico," Transocean said.
The award comes more than a year after it was first announced that the Deepwater Atlas had been earmarked for Shenandoah drilling.
Also, Transocean, which operates a fleet of 37 offshore drilling rigs, said Thursday that the Deepwater Atlas contract provided for a significant performance bonus opportunity based upon agreed operating metrics.
Once delivered from the Juron shipyard in Singapore, the Deepwater Atlas is expected to begin operations in the third quarter of 2022, initially using dual blowout preventers (“BOP”) rated to 15,000 psi.
The Shenandoah program comprises two phases. The initial drilling program is expected to last approximately 255 days and result in approximately $80 million of contract drilling revenue.
Upon completion of the initial drilling program, a 20,000 psi BOP will be installed on the rig, making it Transocean’s second asset with a 20,000 psi-rated well control system after Transocean's Deepwater Titan.
The BOP installation and commissioning is expected to last 45 to 60 days, contributing approximately $17 million of revenue, Transocean said.
Following the 20,000 psi BOP installation, the Deepwater Atlas will start the second phase of the project – the well completion program. This phase is expected to last approximately 275 days and contribute approximately $125 million of contract drilling revenue.
“This is a significant milestone for Transocean, BOE and the Shenandoah partners, as we jointly venture into this new frontier of ultra-deepwater drilling,” said President and Chief Executive Officer, Jeremy Thigpen.
“We are extremely pleased to have secured the maiden contract for the Deepwater Atlas; the first of our two 8th generation ultra-deepwater drillships that will enter the market in 2022, both of which will be outfitted for 20,000 psi ultra-deepwater well operations.
"We are very encouraged by the growing list, across multiple customers, of 20,000 psi opportunities in the U.S. Gulf of Mexico. And, with the only two assets in the world specifically designed to maximize efficiencies for 20,000 psi well completions, we are the undisputed market leader in this space, and thus excited about the future prospects for these state-of-the art assets.”
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