Beach Energy Ltd. has exercised its right to terminate the drilling contract for the Ocean Onyx semi-submersible rig after it arrived late for its planned Otway basin program.
Beach said the rig arrived in Victorian waters in mid-April—later than had been agreed and specified in the contract.
The rig had not yet been accepted by Beach and, although some preliminary start-up costs had been incurred, the company said its spending was “not material.”
The parties are in discussions about future Ocean Onyx operations and the Victorian Otway drilling campaign with a view to a new contract.
Beach’s preliminary assessment is that offshore drilling is unlikely to begin until the financial year 2021.
The cancellation has no impact on the company’s 2020 financial year production. The year’s capital expenditure is expected to be at the lower end or under $875-950 million (Aus.)
In its Otway onshore to offshore drilling program, Beach said the Black Watch-1 well had been completed with results in line with pre-drill expectations. Production from the well will increase the Otway gas plant output when it is tied in towards the middle of this year.
The Enterprise onshore to offshore exploration well is being planned for the second half of this calendar year.