Apache has set out a timeframe for releasing a Diamond Offshore rig after axing a drilling contract earlier this year.
APA Corporation (Nasdaq: APA), the North Sea operator’s parent company, said it plans to part company with the Ocean Patriot semi-submersible “around mid-year”.
A deal for the vessel was struck in May 2022, and it had been due to carry out work in the Beryl area until August 2024.
But Apache opted to cut the contract for the Ocean Patriot rig short – incurring a $12.4 million hit in the process – with the US-headquartered firm blaming the North Sea windfall tax.
Despite scaling back on its drilling plans, the group is enjoyed some North Sea successes, with platform operating efficiencies at both Beryl and Forties above expectations.
In its first quarter results, APA Corp also confirmed the BKSW subsea development well was brought online at the end of March, ahead of schedule.
However, second quarter production is forecast to drop slightly due to planned maintenance and turnaround activity – Apache produce 45,483 barrels of oil equivalent per day in Q1.
Globally, APA Corp’s pre-tax takings for the first quarter were $810m, a hefty drop on the $2.3 billion the company posted in the same quarter last year.
The company also announced plans to reduce its 2023 capital investment by $100m in response to lower Permian Basin natural gas prices.
It means APA Corp’s full-year capital budget is now set at $1.9bn to $2.0bn.
John Christmann, the group’s chief executive and president, said: “APA began the year with strong operational performance and cost management.
“Our oil production exceeded expectations in the first quarter, and we plan to focus on oil-driven activity. APA’s diversified portfolio enables us to respond quickly to changing commodity prices and market dynamics. Accordingly, we are reducing lean gas drilling activity in the US in response to weak Permian Basin natural gas pricing. In Suriname, appraisal work at Krabdagu is progressing, and results thus far are in line with expectations.”
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