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Valaris' (VAL) Jack-Up Rig Mobilized for Selene Well Drilling
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Valaris Ltd. (VAL - Free Report) , an offshore drilling contractor, has mobilized its 123 jack-up rig toward the Selene well in the Southern North Sea. The Valaris 123 jack-up rig is slated to drill the Selene exploration well in the license P2437, operated by the British energy major, Shell.
Shell’s partner, Deltic Energy, stated that the jack-up rig was mobilized on Jul 21, and is expected to reach its destination shortly. The duration of the journey will be determined by the weather conditions during its transit. The drilling operations for the Selene well are anticipated to begin shortly after that. The planned operations will continue for approximately 90 days.
The well is designed to obtain all the necessary information about reservoir quality and gas composition in the Selene gas field. The information gathered during the drilling process should support the advancement of a field development plan and a final investment decision (FID), without the need for an additional appraisal well.
Subsequently, the joint venture partners decided that a full well test is not required. The decision aligns with the standard oilfield practice, and accordingly, the well will be plugged and abandoned post-completion.
The Selene structure is estimated to hold approximately P50 prospective resources of 318 billion cubic feet (BCF) in the Leman Sandstone Reservoir. The estimates span between P90 to P10 range of 132 to 581 bcf, with a geological chance of success (GCoS) of 69%. Notably, the Leman Sandstone Reservoir is an important interval for all nearby gas fields, such as Barque, Clipper and West Sole.
Deltic Energy farmed out parts of its stake to Shell in 2019 and Dana Petroleum in February 2024. This enabled Deltic Energy to be fully covered for its 25% working interest in the Selene well for up to $49 million, in case the outcome is a success. This amount exceeds the operator's estimated successful well expenditure of $47 million, thereby reducing its financial risk.
Per a statement from Deltic, the Selene exploration well is a first-of-its-kind to be drilled in the UK Continental Shelf (UKCS) in 2024 and is a milestone for the company. Management believes that continued exploration of the UKCS is crucial to ensuring energy security, creating vital jobs in the energy sector and reducing the reliance on higher carbon-intensity imported energy.
SM Energy is an upstream energy firm operating in the prolific Midland Basin and the South Texas regions. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
VAALCO Energyis an independent energy company involved in upstream operation business with a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.
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Valaris' (VAL) Jack-Up Rig Mobilized for Selene Well Drilling
Valaris Ltd. (VAL - Free Report) , an offshore drilling contractor, has mobilized its 123 jack-up rig toward the Selene well in the Southern North Sea. The Valaris 123 jack-up rig is slated to drill the Selene exploration well in the license P2437, operated by the British energy major, Shell.
Shell’s partner, Deltic Energy, stated that the jack-up rig was mobilized on Jul 21, and is expected to reach its destination shortly. The duration of the journey will be determined by the weather conditions during its transit. The drilling operations for the Selene well are anticipated to begin shortly after that. The planned operations will continue for approximately 90 days.
The well is designed to obtain all the necessary information about reservoir quality and gas composition in the Selene gas field. The information gathered during the drilling process should support the advancement of a field development plan and a final investment decision (FID), without the need for an additional appraisal well.
Subsequently, the joint venture partners decided that a full well test is not required. The decision aligns with the standard oilfield practice, and accordingly, the well will be plugged and abandoned post-completion.
The Selene structure is estimated to hold approximately P50 prospective resources of 318 billion cubic feet (BCF) in the Leman Sandstone Reservoir. The estimates span between P90 to P10 range of 132 to 581 bcf, with a geological chance of success (GCoS) of 69%. Notably, the Leman Sandstone Reservoir is an important interval for all nearby gas fields, such as Barque, Clipper and West Sole.
Deltic Energy farmed out parts of its stake to Shell in 2019 and Dana Petroleum in February 2024. This enabled Deltic Energy to be fully covered for its 25% working interest in the Selene well for up to $49 million, in case the outcome is a success. This amount exceeds the operator's estimated successful well expenditure of $47 million, thereby reducing its financial risk.
Per a statement from Deltic, the Selene exploration well is a first-of-its-kind to be drilled in the UK Continental Shelf (UKCS) in 2024 and is a milestone for the company. Management believes that continued exploration of the UKCS is crucial to ensuring energy security, creating vital jobs in the energy sector and reducing the reliance on higher carbon-intensity imported energy.
Zacks Rank and Key Picks
Currently, VAL carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are SM Energy (SM - Free Report) , VAALCO Energy (EGY - Free Report) and Energy Transfer LP (ET - Free Report) . SM Energy presently sports a Zacks Rank #1 (Strong Buy), while VAALCO and Energy Transfer carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy is an upstream energy firm operating in the prolific Midland Basin and the South Texas regions. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
VAALCO Energyis an independent energy company involved in upstream operation business with a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.