Coastal Energy, an independent exploration and production company with assets in South-East Asia, announces the signing of a 12 month drilling contract with Swiber Offshore Drilling Pte. Ltd. of Singapore.
The Swiber Jack Up-1 ("JU1") barge mounted rig will be used for the drilling of production, appraisal and explorations wells in the offshore G5/43 block, Gulf of Thailand which is 100% owned and operated by NuCoastal (Thailand) Ltd., a wholly owned subsidiary of Coastal. Drilling is expected to commence in March 2008 with two to three production test wells on the Bua Ban field. These wells will target what are believed to be untested fan delta sand sequences that have been interpreted from the high resolution 3-D seismic survey acquired earlier this year. After completion and testing of the Bua Ban wells the JU1 rig will move to Songkhla field where it will drill a minimum of five production wells. The rig will then commence drilling appraisal wells on several other discovered fields and exploration drilling on mapped prospects in the northern portion of the Songkhla Basin.
The JU1 rig has been specially designed to drill in shallow waters and has the capability and flexibility to accommodate Coastal's diversified well programme which includes open water appraisal, exploration drilling as well as wellhead platform production drilling.
The 12 month contract, which is extendable for an additional 12 months, will enable the Company to drill, test and complete an average of two wells per month at a rig cost of approximately US$65,000 per day which is considerably less than the jack up rates in Asia that are currently averaging US$200,000 per day.
Swiber Offshore Drilling Pte. Ltd. is a wholly owned subsidiary of Swiber Holdings Ltd. a publicly listed Company based in Singapore that specialises in offshore drilling, engineering and construction.
Coastal's Chief Executive Frank Inouye commented:
"This contract with Swiber is a key milestone in the Company's offshore development plans. Due to the delays in refurbishment of the Ocean 66 rig we have sourced an alternative drilling rig and the Swiber team has worked hard to provide a solution that accommodates all our drilling requirements. I am extremely impressed with Swiber's Senior management and their ability to deliver innovative low cost offshore solutions. They, like Coastal, are focused on the Far East and provide a diverse range of marine and engineering expertise. The contract provides flexibility and a cost effective long term drilling solution that will enable the Company to aggressively develop, appraise and explore the G5/43 block."