AGR Group to Begin Two New North Sea Drilling Programs in 2007

AGR Peak Well Management, part of the Norway-based Ability Group ASA (AGR) oil technology and services group, is to undertake two new drilling programs during 2007 involving nine wells for six independent oil companies operating in the UK sector of the North Sea.

The projects, involving total expenditures of more than £100 million, will be carried out over a six to seven month period using two semi-submersible drilling rigs operated by Transocean Offshore (North Sea) Limited and Dolphin Drilling Limited. AGR Peak Group will provide full well project management, including rig and support services, for the operation.

The programs will be run in parallel, one starting circa April 2007 and the other starting around May. The companies involved in the multi-client programs are:

* Antrim Resources (N.I.) Limited (three wells); * Nautical Petroleum plc (two wells); * Bow Valley (one well); * Vermillion Rep SAS (one well); * Ithaca Energy (UK) Limited (one well); and

* Xcite Energy Resources Limited (one well).

The drilling campaigns will be conducted on licenses in the central and northern areas of the North Sea.

Ability Group is now established as the world’s leading independent well operator through its AGR Peak Well Management and AGR Drilling Production Technology (DPT) business units. It is expected that 26 wells will be planned and managed for oil companies during 2006 in spite of the tightness of the rig market.

In August, it was announced that Peak would provide essential services for the drilling of at least 13 offshore exploration and development wells in Australia under a major multi-well, multi-client well construction program using the newly-built WilCraft jack-up rig. This operation, on behalf of at least four operators, is due to begin early in 2007. AGR DPT has also announced a three-year contract for the semi-submersible Bredford Dolphin rig involving the drilling of up to 25 exploration wells for a consortium of seven oil operators. The consortium comprises: BG, DNO, Endeavour, Lundin, Marathon Petroleum, Pertra and Revus. The rig has been taken to Poland for modifications prior to its assignment on the Norwegian Continental Shelf.

Sverre Skogen, AGR’s Chief Executive Officer, said: “These new drilling campaigns demonstrate that, in this mature market, co-operative multi-client ventures are the way forward for many independent oil companies. Through AGR Peak Well Management and AGR DPT we have established ourselves as the market leader for such multi-well, multi-client well management programs.”

Speaking earlier at the 4th Next Generation Norwegian Continental Shelf Operators’ Conference in Stavanger (November 15) Mr. Skogen emphasized that well management and other drilling services would form one of the cornerstones of the group’s future growth. He also highlighted the group’s development of the Riserless Mud Recovery technology enabling operators to undertake zero-emission top-hole riserless drilling. This technology, he said, was providing operators with a more efficient and environmentally-friendly way of drilling the top-hole section of wells. Eight RMR units were currently in operation and it was expected that by the end of 2007 this number would have reached about 20.

Mr. Skogen also pointed to some of the group’s new technologies under development including the CannSeal method of sealing off parts of a reservoir, the Controlled Mud Pressure system for improving bottom hole pressure control when drilling with a riser, and a new generation of ultrasound inspection technology for oil and gas facilities. Looking to the longer term future, Mr. Skogen said that by 2010, some 75 percent of the AGR Group’s earnings could be coming from international operations, as against just 10 percent in 2000 and 50 per cent this year. He expected this to be the pattern of growth for the Norwegian oil service industry as a whole.