Serica Energy enters rig contract for work at Rhum-3

Serica Energy has entered into a contract for the provision of a drilling rig for the intervention work on the Rhum-3 (R3) well, it announced on Tuesday, on behalf of the Rhum partners.

The AIM-traded firm said the work would be carried out using Awilco Drilling's ‘WilPhoenix’, which it described as a third generation, ‘enhanced pacesetter’, harsh-environment, mid-water, semi-submersible drilling rig.

It was expected that operations would start in the fourth quarter of 2020, and last about 70 days.

The work programme would involve recovering debris left in the well by the previous operator and removing an obstruction that is believed to be in place across parts of the downhole completion.

Serica said the well would then be re-completed, and put into production, with R3 already connected to the subsea production infrastructure.

The company added that it had assessed the potential for Covid-19 related matters to impact the availability of equipment and personnel, and determined that there were currently no related issues that would prevent the execution of the project.

“We are delighted that this work will proceed in 2020,” said chief executive officer Mitch Flegg.

“With a strong balance sheet, no debt and limited decommissioning liabilities, Serica is well-placed to weather the wider industry downturn related to Covid-19 and low commodity prices.

“This resilient position is enabling us to also continue with our previously stated work programmes.”

Flegg said bringing the R3 well into operation would increase the production capacity of the Rhum field, and would also improve the expected ultimate recovery of reserves.

“Having three rather than two wells will also provide more flexibility in the management of the field.”

At 1120 BST, shares in Serica Energy were down 0.52% at 107.44p.