Stone Energy Corp., Lafayette, La., has agreed with Ensco PLC to cancel the contract for the Ensco 8503 dynamically positioned deepwater drilling rig that was operating in the deepwater Gulf of Mexico.
Stone will pay to Ensco $20 million, $5 million of which was a deposit previously provided to Ensco pursuant to the drilling services contract. The contract, effective since 2015, was at a day rate of $341,000 and scheduled to expire in August 2017 (OGJ Online, Oct. 7, 2014).
Separately, Stone entered into an interim gas gathering and processing agreement with Williams Co. Inc. at Mary field in Appalachia. The interim agreement provides near-term relief for Stone by permitting Stone to resume production at the field, thereby providing greater volume to Williams.
Volumes from Mary field are now at 45 MMcfed and are expected to rise to more than 60 MMcfed in July and more than 100 MMcfed in August. These volumes are in addition to the 20 MMcfed producing from Heather and Buddy fields.
Stone shut output from the field in September 2015 citing “unacceptable” operating margins caused by low commodity pricing and fees for transportation, processing, and gathering (OGJ Online, Sept. 25, 2015).
