London-listed oil and gas explorer Empyrean Energy has awarded an integrated drilling contract to China Oilfield Services Limited (COSL) for the drilling of the Jade prospect exploration well offshore China.
The project, located in Block 29/11, has a targeted well spud date of December 15 to December 30 this year.
Empyrean said it had reached a deal with COSL at a significantly reduced drilling cost estimate of $12.3m (previous estimate of $18.5m), plus a success-based testing cost estimate of $7.4m.
“This award of contract to COSL at approximately 34% below our previously anticipated drilling cost estimate is a massive leap forward for Empyrean and the reduced drilling cost is effectively better than a 34% JV style deal as there is zero dilution to Empyrean. The countdown to the drilling of the Jade prospect has begun,” said Empyrean CEO, Tom Kelly.
Empyrean is the operator of Block 29/11 in China and has a 100% working interest during the exploration phase. In the event of a commercial discovery, its partner, China National Offshore Oil Company (CNOOC), may assume a 51% participating interest in the development and production phase.