CAMAC Energy Inc. (ticker: CAK) is a U.S. based oil and gas company engaged in the exploration of offshore oil and gas leases in deep water Nigeria. The Company was founded in 2005 and has offices in Houston, Texas, Nairobi, Kenya, Banjul, Gambia and Lagos, Nigeria.
CAMAC Energy has been notified by Allied Energy PLC that the assignment of the Sedneth 701 rig, originally proposed for July 31, 2013 has been delayed. The contract was under the Deed of Assignment with Transocean Ltd. and Nigerian Petroleum Development Corp. Ltd. for the drilling of Oyo Well #7. The reasoning behind the delay is due to unanticipated drilling problems at its current locations.
CAMAC expects the spudding of the well to be delayed at least two to four weeks, and plans on discussing the delay during their August 13 conference call. The press release can be found here.
Kosmos Energy Ltd (ticker: KOS) is also facing the challenges of decreased rig availability in Africa. KOS responded by signing a three year lease in early June 2013 on the Atwood Achiever, an ultra-deepwater rig that will be built by June 2014. In the company’s conference call August 5, 2013, Brian F. Maxted commented on the ability of Kosmos to keep the rig at work for the elongated lease time period in a challenging rig climate in Africa.
“…Obviously in what continues to be a rig challenged environment in the Atlantic Margin is securing a rig on an operation basis to give us the flexibility to firm the program to begin with for next year and then to give us the flexibility really in the event of success was important for us,” Maxted said in the conference call. “And so making a long-term commitment to, I think really reflects the fact of our confidence in the exploration program. In the event that we do have success in any one of our opportunities, that rig alone won’t be enough. And on the other side of the coin, we’re pretty confident within today’s rig environment that if we do need to share some time on that rig with others we will be able to indeed. We’ve been approached by a number of companies looking to secure slots on that rig. So we’re pretty comfortable – very comfortable that the rig will be employed for the three years…Hopefully, we’ll see some pretty significant partners joining us.”
In May of this year, Ophir Energy plc also decided to play the time game in their Tanzania Exploration Project and extend their contract with the Deepsea Metro I for at least 18 months.
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In the press release, Ophir said, “By extending the DSM-1 contract, the parties save on the considerable cost of mobilizing a drillship from another region, reducing the drilling effective day rate. This arrangement provides maximum flexibility to effectively explore Ophir’s operated acreage while continuing with exploration and appraisal in the Ophir-BG Group Joint Venture.”
Rig shortages have been an issue since the beginning of the drilling boom in Africa according to a Reuters article by Kelly Gilblom. According to Gilblom, the wait for a rig can be over a year and the rental can be $500,000 per day.
“Demand for deepwater rigs has gone up for use in east Africa … there is definitely more international interest in the region,” Marne Beukes, an analyst who studies sub-Saharan Africa for global data firm IHS, said in Gilblom’s article.
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