EnQuest Cancels Dolphin Drilling’s Rig Contract as Kraken Drilling Campaign Hits Hurdle
November 20, 2024
UK-based oil firm EnQuest has terminated rig contract with Dolphin Drilling for its Borgland Dolphin semi-submersible drilling rig as the joint venture partners in the Kraken field fail to reach agreement on the asset’s 2025 drilling program.
EnQuest informed Dolphin Drilling about the early termination of the previously announced 137-day drilling program for Borgland Dolphin.
In exchange for the cancellation of the contract EnQuest will pay Dolphin a fee of $20.75 million before the end of November.
Borgland Dolphin is currently at Las Palmas, Gran Canaria. The earlier planned class renewal will be paused while future contract opportunities continue to be assessed, Dolphin Drilling said.
The rig is currently tendered toward several campaigns with attractive economics. However, no further commitments are planned to be made prior to the signing of a firm agreement, according to the company.
“While disappointing to receive the cancellation of the contract, we continue to focus our efforts on securing long term backlog for the Borgland. The timing of the termination allows us to pause the SPS, improve liquidity, and carefully plan the next steps,” said Bjørnar Iversen, CEO of Dolphin Drilling.
Equest said that the joint venture partners were unable to agree a 2025 asset drilling program for the Kraken field in the North Sea, which resulted in the cancelation of the Borgland Dolphin contract, without unveiling additional details.
The company said the cancellation provides the opportunity to reduce 2025 net capex by around $60 million, noting it plans to reschedule the Kraken infill wells as part of a wider program of drilling in 2026.
To remind, Dolphin Drilling signed a Letter of Intent (LOI) with an undisclosed operator for 500-day drilling campaign in the U.K. for Borgland Dolphin rig in late November 2023. The drilling campaign was scheduled to begin directly after the rig’s work with EnQuest.
