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August 2014

Vol. 19, No. 31 Week of August 03, 2014

Conoco contracts with Doyon for new-build rotary rig for Kuparuk

ConocoPhillips Alaska said July 28 that it has contracted with Doyon Drilling for a new drilling rig, Doyon 142, the first new-build rotary rig the company has added to the Kuparuk River rig fleet since 2000.

The rig is scheduled to begin drilling in early 2016.

Mike Wheatall, ConocoPhillips Alaska manager of drilling and wells, said at a Fairbanks press conference that ConocoPhillips has signed a five-year contract for the rig.

Aaron Schutt, president of Doyon Ltd. said building the rig was an opportunity to both make money for Doyon’s shareholders and to employ those shareholders.

It isn’t often that Doyon gets to build a large North Slope rig; Doyon’s last new rig went into service in 2012, he said.

“Long-term contracts for drilling around the world are actually quite rare,” Schutt said.

Wheatall said ConocoPhillips has three Doyon rigs under contract. The five-year contract for Doyon 142, he said, is the period of time Doyon “considers sufficient to justify ... the capital investment needed to build the rig.” Doyon said North Slope rigs cost more than $100 million.

Third recent rig addition

“Doyon 142 will be the third rig we have added to North Slope operations after tax reform,” Wheatall said, referring to passage of Senate Bill 21 in 2013. Nabors 7ES was added to ConocoPhillips Alaska drilling operations in May 2013 and Nabors 9ES in January.

He said that while rigs come and go depending on the company’s projects, ConocoPhillips expects to be at seven rigs once Doyon 142 is working, up from an average of four rigs between 2008 and 2012.

Ron Wilson, Doyon Drilling’s general manager, said Doyon 142 is under construction near Edmonton, Alberta, with engineering 98 percent complete and fabrication 23 percent complete. Wilson said Doyon expects the rig to be fully assembled about this time next year. At that point, it will be broken down and shipped to the North Slope, arriving in the winter of 2015-16, where it will be reassembled. Wilson said the goal is to have Doyon 142 at work approximately the first of April 2016.

Value of the rig

Wheatall said ConocoPhillips is pursuing development both at Sharks Tooth, drill site 2S, and at West Sak NEWS, drill site 1H.

“Without this rig, we would have had to push back the start of the 1H development several years,” he said.

“This rig will have capabilities that no other rig that we have in our fleet ... can perform,” Wheatall said, and “will be able to drill wells that we wouldn’t be able to drill” with the current rig fleet.

Doyon’s Wilson said one of the most unique things about Doyon 142 is that it will be able to get over different well spacings, whether they are 10-foot or 15-foot. Keeping the weight down on the rig down was also important because of roads and river crossings, he said.

Wheatall said one of the most unique things about Doyon 142 “is it will be able to operate both at Kuparuk and Alpine.”

“There’s no rigs on the North Slope right now that can cross the Colville River in the wintertime and still fit on all of our wells at Alpine,” he said. ConocoPhillips as more than 200 wells at Alpine, Wheatall said. “This rig was designed ... very, very carefully so that we can keep the weight down and cross the Colville River, but it can still work on all of the wells at Alpine,” something no other North Slope rig can do. Alpine is not connected to North Slope infrastructure by road. Rigs are moved in and out of the field on winter ice roads, partly built offshore.

- Kristen Nelson






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