ENSCO Jackup Rig Damaged in Gas Blowout, Fire

ENSCO International Incorporated and Forest Oil Corporation reported that one of ENSCO’s jackup rigs sustained extensive damage while operating in the Gulf of Mexico. ENSCO 51 was on location in Eugene Island Block 273 drilling a development well over a platform (the “A” platform) for its customer, Forest, the operator of the block. Eugene Island Block 273 is located approximately 75 miles offshore.

Shortly after midnight on Thursday, March 1, approximately 15 hours after running and cementing a third casing string at approximately 1,650 ft., an annular flow was detected. The volume of the gas discharge continued to increase. All personnel were safely evacuated from the rig. Offshore supply vessels equipped with water cannons were dispatched and began to deluge the platform. On March 2, at approximately 3:30 a.m., the well ignited and the resulting fire caused extensive damage to the rig’s substructure, drill floor and derrick. Plans are being finalized to mobilize ENSCO 55 to drill a relief well. It is expected that the rig will be on location next week.

Additionally, efforts are underway to extinguish the well fire and cap the well. Special equipment is on location, and the fire, rig and the adjacent platform are being deluged with water. If these measures are not successful, a relief well will be drilled, and measures will be prosecuted until the fire is extinguished and the flow from the well has been contained.

Forest owns an approximate 56 percent interest in Eugene Island Block 273. During the drilling operations, the production on the “A” platform was shut-in. Prior to the shut-in, the platform was producing approximately 1.5 Mmcf per day from five wells. No liquid hydrocarbons were being produced at the time of shut-in. Eugene Island Block 273 is a mature natural gas field. The Eugene Island 273 facilities are insured by its owners.

The ENSCO 51 is fully insured and ENSCO anticipates damage to the rig to be recoverable from such insurance coverage. ENSCO, headquartered in Dallas, Texas, provides contract drilling and marine transportation services to the international petroleum industry.