Stena Rig Contract14 Aug 2020 00:30
Rig Contract Key Terms:
Rig
A Sixth Generation drillship, which shall be provided with an integrated managed pressure drilling system on board, and which may be any of the Stena IceMax, Stena Forth, or Stena DrillMax (or, subject to agreement, any other suitable Stena vessel).
Drilling Window
Stena must provide the rig on location to commence drilling within a firm time window of 15 December 2020 to 1 February 2021.
Sequence to drilling
On signing of the Rig Contract, BPC has paid to Stena an initial down payment amount of $250,000 and the parties have commenced working together collaboratively to prepare for drilling activities in the drilling window on the basis of any one of the identified Stena drilling rigs.
At any time after 1 September 2020 but prior to 1 November 2020, Stena must provide to BPC a commencement notice, which notice must specify: (i) the specific drilling rig to be deployed by Stena,
(ii) the location(s) which that drilling rig will be mobilised from / demobilized to, and
(iii) the date within the drilling window on which that drilling rig will arrive on location and be ready to commence drilling operations.
Drilling Duration
The duration estimated to complete the well, which is approximately 30 -45 days.
Contract Payments
BPC is to pay a fixed lump sum mobilization fee of $2 million at such time as Stena delivers a commencement notice to BPC. Once the rig arrives on location BPC is to pay for the operating use of the rig, inclusive of the use of the managed pressure drilling system. In aggregate, the total value of payments to be made by BPC to Stena in respect of use of the rig, inclusive of mobilization, is estimated to range between US$8 million and US$11 million depending on the duration of drilling activities.
Penalty regime
If Stena fails to deliver a commencement notice by 1 November 2020, or if, following delivery of a commencement notice, Stena fails to provide the nominated drilling rig, a penalty of $7.5 million will become payable by Stena to BPC.
Investment Options
Consequent on entry into the rig contract, BPC has granted several investment options to Stena Drilling Limited (the "Optionholder"), such that, prior to 1 December 2020, the Optionholder has the right (but not the obligation, and there can be no assurance that the Optionholder will exercise the right, all or in part) to (i) subscribe for up to $10 million of new equity in BPC on the same terms and conditions as would apply in any BPC capital raising, or (ii) farm-in to the BPC southern licences on the basis of $10 million for a 10% non-operated working interest. If the Optionholder were to seek to take up either of these investment options, the consideration could be satisfied either in cash or by way of offset against amounts payable by BPC under the Rig Contact.
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