United for growth
For 12 years now, Atlantica Tender Drilling has been offering unique and cost-effective solutions in the offshore development drilling market. Having designed and now operating two semitender rigs, the Houston-based company has successfully sidestepped the slowdown of the industry, thanks to the long-term contracts the units are tied into. Named Beta and Delta, they are currently working on projects in South America and Africa, continuing to deliver exceptional results to the business’ respectable clientele.
“The Beta is working on the Papa Terra field for Petrobras in Brazil and, following a pause in drilling activity to review the field’s economics, there now appears to be a renewed interest in the project in the wake of the recent success of the last well,” explains President and CEO, Kerry Kunz. “Given the year-long inactivity in drilling back in 2016-17, Petrobras are still in the early stages of realising the field’s potential. Over this time, we have worked with them to forge a tighter relationship and we are eager to deepen our collaboration as their drilling plans mature.”
Moving on to Atlantica’s second rig, Kerry praises the big success the Delta has been: “It is presently performing the development drilling programme on the Moho Nord field in The Congo for Total. Similarly to the scheme in South America, our team has done very well and has established a close relationship with the client.”
For projects like the ones just discussed, safety inevitably comes first. Acknowledging that, Atlantica has invested heavily over the past two years in its people, making sure that they operate safely as a team. “We have introduced competency-based training and we believe that this investment has paid off in a solid safety record and strong uptime. Where other companies have had to reorganise their balance sheets through bankruptcy, we have been able to pay down debt and improve our balance sheet,” Kerry points out.
“In my opinion, a strong safety record in contract drilling resides with your ability to consistently apply the basics day in and day out,” he continues. “Take care of your people, invest in their education, and treat them with respect – these are the postulates that we are following. It is that culture of respect that will enable the team to flourish. We are constantly seeking feedback on our performance and we team up with the National Safety Council on an annual basis to implement employee perception surveys. All personnel on both rigs take part in this feedback exercise, with the National Safety Council benchmarking various facets of our safety culture against their massive database of all industries across the globe. We find it an incredibly helpful collaboration that always provides us with valuable insight where we can build on our strengths and involve the field in addressing any weaknesses identified.”
While the drilling industry is gradually recovering, the process is taking time, which propels companies to proactively look for solutions that will keep them stable in the market. In Atlantica’s case, the organisation is on its way to finalising its merger with Energy Drilling Pte, which will provide it with a stronger financial footing to expand further. “The rationale behind the merger is to participate in industry consolidation as a larger company,” Kerry claims. “To date, both companies are illiquid investments and the downturn has not given our owners the opportunity to monetise their investment. By growing in size, we can float the company on an exchange and provide a liquid trading platform for existing shareholders to exit their investment on their own individual timelines.
“As we currently operate in different theatres for different customers, the combined company will also give us a larger geographic exposure and a broader customer base,” he adds. “The merger is slated for the beginning of the new year and one of our major tasks for the near future will be to synchronise the two entities.”
The coming together of Atlantica and Energy Drilling will provide the joint organisation with some extra peace of mind in the face of a growing trend across the industry that is seeing the rise of investment in green technologies at the expense of hydrocarbons. Kerry comments: “Today, the upstream oil and gas business is struggling to attract capital. Many large funds and institutional investors are favouring renewables, which is hampering our ability to finance the capital-intensive nature of our business. It will be incumbent upon us as an industry to make ourselves more energy efficient and lessen our environmental footprint, demonstrating a commitment to Environment, Sustainability, and Governance (ESG) principles. Nevertheless, I feel that, even with renewables certainly being welcome and embraced, the everincreasing demand for energy worldwide, will necessitate drilling for the next several decades, given oil’s broad use as a fuel and a bi-product.”
Alongside the impending merger with Energy Drilling, another move that is on the cards for Atlantica in the years to come, is the acquisition of more assets that will provide a platform for growth for the company. “We will be scouring the market in the months ahead and our present focus is the jack-up and tender market, which seems to be the most burgeoning at the moment. In five years’ time, I would like to see us with a fleet of eight-to-ten rigs comprised of both jack-up and tenders, operating in all major oil and gas theatres. Ultimately, our objective in this timeframe is to be listed publicly with a liquid stock on a strong exchange,” Kerry concludes by laying out Atlantica’s aspirations.
Atlantica Tender Drilling
Services: Offshore oil drilling