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Howard. IMO the Gefco rig may be capable of drilling small diamater mineral or CBM holes to 9000' but it is not capable of drilling an oil exploration well to this depth. This rig was the wrong rig for the job and should never have been bought in the first place. It is also worth noting that Bellevue is programmed to be drilled to 9,514' (2,900m).
On what grounds was the sale illegal? Was the company so baddly run that someone was able to sell it's only major asset and no-one noticed? I also understand, according to PR's at the time that the rig was sold for $1.5 mil.
If Empire were able to get a rig capable of drilling to 2900m from the mainland then IMO they should be able to start drilling within 6 months. If they try to buy their own rig then IMO they will need at least 9 - 12 months. The problem Empire have with getting a rig from the mainland is that they have such a bad reputation that they would have to pay cash upfront before anyone would move a rig. The other problem would be rig availability as rigs of this size are in very short supply
Howard, The rig that Empire bought was sold because it was completly unsutible for drilling oil exploration wells, did not have a lot of the basic required equipment (sub-base, BOP's mud pits etc etc). The company that bought it used it for drilling surface hole to a few hundred meters.
I can also remember more than a year ago when we were told that Hunt Rig 3 was gaurenteed to drill Bellevue it did not. We were also told the rig would not depart the state before the well was drilled - it did. Even earlier we were told Empire had the funds to drill - they didn't. It is not difficult to see that the so called have nots have a far better record!
IMO MRT obviousle have reservations about Empires financial capabilitys as they only granted half the requested area for a reduced period (2 years instead of the normal 5 years.
If Empire contract a drilling company like Century, Ensign, Weatherford or Hunt who have rigs in Australia and can get a slot with a sutible rig (which could be very difficult) then tehy could start drilling in 2-3 months. If they try to bring in the Gefco rig from the US IMO it will take at least 6 months to get the rig into Tasmania, set up and certified. Both cases assume that Empire have the financial resources to do this.
If only a few well are going to be drilled then it will be far cheaper to bring an established rig in from the mainland. Running a rig is an expensive business and wages for the crew alone can add up to more than $15,000 a day, fuel can easily cost $1,000 to $3,000 a day depending on the rig. The average dayrate for a rig in Australia is around $35,000 so even if Empire could run their rig for $15,000 a day (which is very unlikley) they would only save around $600,000 per well.
I admit that I have not run any oil companies but I have spent a very long time in the oil exploration industry both in the field working on drilling rigs and in managment running drilling operations from town so I do know what I am talking about.
IMO the reason the Michael Roberts sold the origional Gefco rig is because it was, and as far as I know still is, completly unsutible to drilling an oil exploration well to 2,900m. Without extensive and expensive modifications and millions of dollars of additional equipment this rig could not have drilled in Tasmania. I also think that the same will applie to the new rig. A couple of other things to note is that Michael Roberts drilled a well in Tasmania with Hunt Rig 3 and Empire had Hunt Rig 3 rigged up over the well ready to start drilling. To try and blame others for Empires failings is a joke.
I agree that preliminary work, including seismic, has to be done before drilling, but this should not take 10 years and cost $50 million
My point is that Empire have spent (wasted?) far to much money without haveing drilled a well.
As I said production does require a seperate license but exploration drilling does not and the previous license held by GSLM/Empire allowed and probabley even required exploration drilling to take place. To say that Empire could not drill before because they did not have an appropriat license is wrong.
howard, it may have escaped your notice but the way your explore for oil is by drilling and you can not find anything unles you do drill. Once oil has been found by drilling then a production liscense is required before full production can start.
There are also a lot of companies who have spent a lot less than $50mil drilled several wells in less than 10 years.
Hi
The ONLY way to prove the presence of oil is to drill a well and flow oil from it. All seismic can tell you is that the geological structures below the surface are capable of containing oil. The majors will often drill many wells in an area before finding anything and world wide the average success rate is 1 in 10! To have a "proven reserve" you have to have detailed seismic and wells drilled on the structure.
How can you say the company has moved forward? At one stage Empire had a rig riggesd up over the hole ready to start drilling. Now the have a license only.
Something to note is that they have not made the substructure yet and that this will not ship until later. The substructur could well take 1 or 2 months to make. As the substructure is what the rig sits on to allow the BOP's to be put in place the rig can not be fully rigged up until this arrives.
For a rig that has been operating for the same operator for a number of wells a rig move with this type of rig will take 3-6 days. However for a new operator bringing a new rig into the country, particularly one not built to Australian standards it will take a lot longer. Once the rig is rigged up it will have to be completley inspected by independent third party inspector and all issues identified addressed and the rig made compliant before drilling will be allowed to start. IMO this process will take 2-3 months. Transporting a rig from the US normally takes around 3 months, this includes time for cleaning the rig in the US before shipping, transporting the rig, clearing customs in Australia and transporting to site.
I have seen a lot of companies bring rigs into Australia and in my experiance it takes at least six months even for a major operator like Santos. IMO it will take Empire an absolute minimue of six months to get a rig ready to drill.
Hi,
I do not know what timeframe Empire are claiming but IMO it will take at least 6 months to get the rig moved to location, all other required equipment sourced, personnel trained and the rig certified as ready to drill. This is probably an optimistic estimate and given Empire’s previous history it would not surprise me if this took a year.
Hi Heraclitus,
IMO the Gefco 85 could only have drilled a 3000m deep well in Tasmania with considrable modification and upgrading. For a start it would have required a subbase to alow BOP's to be positioned under the rig.
The rig was bought by a company who I understand are using it to drill shallow surface holes (100-400m) prior to a bigger rig moving onto location and as far as I know it has never drilled an oil exploration well.
If there are other people that are desperate to take over Empire's license why have no other applications been made, either for the area Empite applied for or any of the adjacent araeas which are currently vacent?
IMO it will cost an additional $2-4 million to purchase this equipment and another $1 million to transport it to Australia.
Hi,
The Gefco rig is only a basic rig and as a minimum the following extra equipment will be required before drilling can comence:
BOP's (Cost $1/2 mil minimum)
Drillpipe
Drill Collars
Mud Pits
Drilling Line
Koomy Unit
Tongs etc
All this equipment is normally supplied by the drilling contractor (it was all supplied by Hunt) and will add at least $2mill to the cost of the rig.
Rigs built in America are not compliant with Australian Standards, particularly electrical compliance and most rig have to be completly re-wired.
Getting the rig transported to Australia will cost at least $1 mil with probably another million required for transporting the rest of the equipment. Transportation normally takes 2-3 months and another 2-4 months to get the rig setup and certified as "Fit for Purpose" so IMO it is likly to be at least 6 months before drilling can start.