Category Archives: Offshore

August 12 (Renewables Now) - Canada-based Northland Power Inc (TSE:NPI) and Germanys RWE Renewables GmbH are adding a fourth project to their Nordsee offshore wind cluster in the German North Sea to reach an overall capacity of 1.5 GW.

The 225-MW Godewind scheme is joining the 433-MW Nordsee Two, the 420-MW Nordsee Three and the 480-MW Delta Nordsee to form a single bundle, the Canadian power producer said on Friday. The cluster will be developed by Northland Power and RWE through a joint venture that was set up in January.

With the additional project, the unit of energy major RWE AG (ETR:RWE) and its Canadian partner will seek to enhance the size and scale of their collaboration and realise synergies. The deal for the JVs expansion is pending formal closing, Northland Power said.

As previously agreed, Northland Power and RWE will develop, build and operate the wind farms through an entity that is 51%-controlled by the German firm. The duos plan is to develop and manage the projects on a joint basis and reach commercial operations between 2026 and 2028.

The expanded cluster will be located in close proximity to the 332-MW Nordsee One wind farm, which is jointly owned by RWE and Northland Power.

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RWE, Northland expand Nordsee offshore wind tie-up to 1.5 GW - Renewables Now

Re Offshore wind developer sensitive to publics concerns (Other Views, Aug. 6): I read the column by Kenneth Kimmell, vice president of offshore wind development for Avangrid Renewables, with interest. I question his due diligence.

He states there is ample parking on the north side of the market. There are approximately 70 spaces in the lot he references. The lot the company will commandeer behind the market has 136 spaces. That creates a shortfall of 66 spaces where residents can now park.

He goes on to state the traffic along Sandbridge Road will not be impacted by the laying of cable. Now, I admit Im not a traffic engineer, but unless they plan on using a shovel instead of heavy equipment, it is impossible not to impact the flow of traffic.

Kimmell goes on to state, our intent is to lay cables only in already disturbed areas ... . Sandbridge Road is a two-lane road that is barely wide enough for two cars to pass safely. Over the years we have pleaded with the city to improve this section of Sandbridge Road. Their reply has always been they cant because it is protected wetlands. I would like to know where these already disturbed areas are located and why the city hasnt used this information to improve the road in the past.

The wind farm is located off the coast of North Carolina where there have been 55 hurricanes since 1851, according to UniversalProperty.com. North Carolina is the third most vulnerable state for hurricanes on the east coast.

Janet Y. Meyer, Virginia Beach

Re Offshore wind developer sensitive to publics concerns (Other Views, Aug. 6): I read Avangrid Renewables response to Sandbridge residents concerns. My question is why not tie in the power for both wind projects, Dominion Energys recently approved and Avangrids newly proposed, at the same location?

Having Avangrid tie in at the state military reserve as proposed for Dominion does mean some more miles of undersea cabling, but it would save the expense and disruption of digging up Sandbridge. After all, whether the cables from the two projects come ashore separately or together, they are going to tie into Dominions infrastructure.

James Luehman, Virginia Beach

This morning, at my local store, I met a young mother and her 3-year-old son. She held a sign that said, Please help us. She was a beautiful young mother with sparkling blue eyes and an exaggerated thin frame. Her face was blistered from the sun, her nose sore and peeling.

She and her son were sleeping in a car. She had a fistful of $1 bills given to her from the sympathetic shoppers who passed her, but not enough for one nights stay.

I filled her meds and called shelters and emergency services. The first emergency service for homeless mothers and children was an adoption agency. I called another emergency shelter. It was closed on the weekends. Then I called another; she could only get in if she was beaten and abused.

Finally, a Norfolk agency said, there is no help. She can put her on a list; this worker buys hotel rooms for mothers and kids with her own money. But unless youre a pregnant mother, politicians do not care. Children dont vote and neither do the homeless.

Republicans, as long as they can claim, they are saving the babies, they dont care. But once the child is born and is homeless or in need of medical care? They blame you for societys ills.

The mother and 3-year-old? I left her begging in the Walmart parking lot. There is no help for them; they will no doubt sleep in a car again tonight, in America in the 21st century. Where is our humanity?

Lisa Petry, Chesapeake

Weekly

The week's top opinion content and an opportunity to participate in a weekly question on a topic that affects our region.

Re Virginia Beach book critics argue one-size-fits-all obscenity standard no longer effective; advocates disagree (Aug. 8): I see that Del. Tim Anderson and former congressional candidate Tommy Altman are back at banning books again.

They are not satisfied with taking books out of school libraries, but are going after bookstores as well. As stated in the article, Altman didnt like what he read on seven pages of a book that is 240 pages long and decided to object to it. These gentlemen not only want the pages banned from bookstores, they want a temporary injunction against anybody who sells, transports, etc., the books. Why dont people, especially these two, understand that a parent can decided for his or her own child what he or she reads?

What is next for Anderson and Altman? Burning books?

Lynn Davidson, Chesapeake

Every law-abiding U.S. citizen and immigrant seeking citizenship should be supportive of stopping Mexican cartel, illegal infusion of fentanyl and all drugs across our southern border. Period.

Come on, President Joe Biden, stop the death pill. Direct and focus the Department of Homeland Security on its job to safeguard the homeland. Today, you are miserably failing. Come on, Biden, wake up and get engaged.

John R. Baer, Yorktown

Originally posted here:

Letters for Aug. 12: Offshore wind will be disruptive to Sandbridge - The Virginian-Pilot

Offshore staff

LONDON Trade association Offshore Energies UK (OEUK) has issued new guidelines to help UK offshore oil and gas companies reduce methane emissions from their production of oil and gas.

The guidelines coincide with implementation of the associations Methane Action Plan (MAP), one of the targets of last years North Sea Transition Deal between the UK government and the offshore oil and gas industry.

Methane is thought to have 20 to 86 times the impact of carbon emissions. Globally, the oil and gas industry is said to be the third largest emitter of methane after agriculture and waste.

It has a shorter atmospheric lifespan compared to CO2, OEUK added, so reducing methane emissions can have a near-immediate positive impact on the atmosphere that carbon reductions alone cannot achieve.

MAP commits the sector to halve its methane emissions by 2030 from levels in 2018 and to adopt the Oil and Gas Climate Initiative (OGCI) methane intensity target of 0.25% by 2025.

It also recommends that companies and owners of offshore installations set up their own action plans by year-end 2023. The guidelines should provide assistance in terms of identification of methane sources, detection and measurement, quantification, and abatement

OEUKs Emissions Improvement Manager Thibaut Cheret said, Although the offshore oil and gas industry represents just 2.7% of total UK methane emissions, we recognize that theres always more to be done. These guidelines will help steer the sector on its journey to net zero, showing wider leadership as to what can be achieved, even in a mature basin.

08.11.2022

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OEUK issues guidance on offshore methane reduction measures - Offshore magazine

The Inflation Reduction Act (the Act), which passed the U.S. Senate on Aug. 7, 2022, requires that previously announced offshore lease sales in the Gulf of Mexico and Alaska be held during the next two years.

The Act requires the U.S. Department of the Interior (Interior) to award leases to the highest bidders in Lease Sale 257, which was held in November 2021. In January 2022, the U.S. District Court for the District of Colombia vacated Lease Sale 257 after finding that Interior's environmental review failed to adequately consider certain greenhouse gas emissions related to holding the offshore oil and gas lease sale. SeeFriends of the Earth v. Haaland,2022 WL 254526 (D.D.C. Jan. 27, 2022).

The Act directs Interior to rely on its Record of Decision for Outer Continental Oil and Gas Leasing Program Final Programmatic Environmental Impact Statement issued on Jan. 17, 2017 (82 Fed. Reg. 6643). The Act also requires Interior to move forward with Lease Sale 258 in Alaska Region's Cook Inlet by Dec. 31, 2022, and two additional Gulf of Mexico Lease sales, Lease Sales 259 and 261, by March 2023 and September 2023, respectively. The Act provides that the restored and new lease sales be held despite the fact that the Five-Year Leasing Plan mandated by the Outer Continental Shelf Lands Act expired in June 2022.

Interior is currently evaluating a new Five-Year Leasing Plan, although it is uncertain if Interior will allow for future offshore oil and gas leasing other than the leases mandated by the Act. (See previous Holland & Knight alert, "Interior Releases Draft Program for New Offshore Leases; Future Uncertain," July 5, 2022.) The Act also ties new offshore wind leasing to offshore oil and gas leases by requiring that, in order to hold a new offshore wind lease sale, at least one offshore oil and gas lease sale that offered at least 60 million acres be held within the year prior to the new offshore wind sale.

The House of Representatives is expected to pass the Act as early as this week. (For an in-depth review of the Inflation Reduction Act, see Holland & Knight's alert, "The Inflation Reduction Act: Summary of the Budget Reconciliation Act," Aug. 8, 2022.)

Read more:

Inflation Reduction Act Advances Stalled Offshore Oil and Gas Lease Sales - JD Supra

Dive Brief:

A performance guarantee requirement for Dominion Energy Virginias 2.6-GW offshore wind project is untenable, Robert Blue, Dominion Energy chairman, president and CEO, said Monday during an earnings call.

The company is considering appealing a decision issued Friday by the Virginia State Corporation Commission, or SCC, that puts unprecedented cost risk onto the utility, according to Blue.

Meanwhile, Dominion Energy Virginia has paused hooking up new data centers in part of northern Virginia and last week asked the PJM Interconnection to approve a $500 million to $600 million, 500-kV transmission line to begin easing constraints in the area, company officials said during the call. The utility is accelerating other transmission projects so it can meet demand from data centers, a rapidly growing part of the utilitys customer base, Blue said.

The SCC last week approved a rate rider for recovering the cost of Dominions $9.8 billion offshore wind project and related onshore transmission facilities.

The commission ordered Dominion Energy Virginias customers to be held harmless for any shortfall in energy production below the projects expected 42% annual net capacity factor, measured on a three-year rolling average.

Meaning, of course, that roughly half the time, it would be above that level and half below, Blue said. Effectively, such a guarantee would require [Dominion Energy Virginia] to financially guarantee the weather, among other factors beyond its control, for the life of the project.

The performance guarantee creates an unprecedented layer of financial one-way risk for the utility and is inconsistent with the utility risk profile expected by investors, Blue said.

There are obviously factors that can affect the output of any generation facility, notwithstanding the reasonable and prudent actions of the operator, including natural disasters, acts of war or terrorism, changes in law or policy, regional transmission constraints or a host of other uncontrollable circumstances, Blue said.

As part of its shift away from fossil-fueled power generation, Dominion Energy Virginia expects to ask the SCC this quarter to approve about a dozen utility-owned solar and energy storage projects totaling at least $1.5 billion, Blue said.

The solar supply chain continues to be challenging, with prices for certain components still elevated, according to Blue. However, our plans remain largely de-risked, he said.

Dominion Energy expects to spend about $32 billion reducing its carbon dioxide emissions from 2022 to 2026 and up to $73 billion through 2035.

Dominion Energy decarbonization initiatives

Meanwhile, data centers in northern Virginia have grown to about 2,600 MW of load and constitute about 20% of Dominion Energy Virginias electric sales, according to Blue. PJM expects data center load in the utilitys service territory to grow by another 2,600 MW by 2027, he said.

As a result, Dominion Energy Virginia is speeding up by several years plans for new transmission and substation infrastructure in part of eastern Loudoun County, Blue said.

The utility expects to restart new connections in the near term, but the area needs two new 500-kV transmission lines, he said.

The issue wont immediately affect Dominion Energy Virginias sales growth, but it could slow sales growth in the 2024-2025 time frame, according to Blue.

We're not at the limits of our facilities today, but we need to act now to alleviate transmission constraints in the future, he said.

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Dominion Energy mulls appeal of 'untenable' performance standard for $9.8B offshore wind project - Utility Dive

August 8 - Earlier this summer, four European countries agreed to develop coordinated offshore transmission links, showing how rising renewable energy targets are accelerating plans for an offshore wind grid across northern Europe.

Germany, the Netherlands, Belgium and Denmark plan to build four artificial islands that transmit power and green hydrogen to multiple countries. The partners pledged to install at least 65 GW of offshore wind capacity in the North Sea by 2030 and 150 GW by 2050.

CHART: Installed wind capacity by country

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The four countries will "take all relevant and appropriate steps to speed up regulatory and permitting processes as much as possible and invite the European Commission [EC] to actively support these efforts," energy ministers said in a joint declaration in May.

The announcement came as the EC hiked renewable energy targets for the European Union and set out new rules that will accelerate permitting in a bundle of measures aimed at ending the region's reliance on Russian gas and oil.

Offshore wind farms have thus far been developed using individual radial links to shore. Multi-purpose interconnectors (MPIs) and meshed offshore grids would allow power to be sent where it is most needed and reduce transmission costs.

The Kriegers Flak offshore interconnector between Denmark and Germany has proven the concept but larger multi-national concepts face significant regulatory and construction challenges, industry experts said.

The UK is following a similar path as rapid deployment of offshore wind raises onshore congestion risks.

The UK will need to export power to achieve the government's target of 50 GW offshore wind by 2030 and offshore interconnectors could be installed in the North, Irish and Celtic seas, Nicola Medalova, Managing Director of Interconnectors for the UKs National Grid, told Reuters Events.

National Grid has applied to UK regulator Ofgem to develop a framework for a pilot offshore interconnector within six months and install a fully commercial facility by 2030, Medalova said.

Growth driver

Offshore interconnectors, energy islands and meshed offshore grids will play a growing role as coastal availability dwindles and development shifts further offshore, Henrich Quick, Head of Offshore at 50Hertz Transmission, TSO for eastern Germany and Hamburg, said.

Offshore interconnectors can help avoid curtailments and increase the value of offshore wind farms, widening the deployment potential. Offshore grids can help minimise transmission costs as more projects seek landing points.

The Kriegers Flak interconnector provides 400 MW of bi-directional transmission capacity between Vattenfall's Kriegers Flak wind farm in Denmark and EnBW's Baltic 1 and 2 wind farms in German waters. The interconnector increases the export potential from Denmark to Germany, where power demand is greater, and provides greater system flexibility.

MAP: Average wholesale power prices by country in Q4 2021

The Kriegers Flak project required a number of technical innovations and advanced controls and received funding from the European Energy Programme for Recovery (EEPR). 50Hertz incorporated a new master controller for electricity flows and this concept could be built on for future projects to further increase efficiency, Quick said.

Completed within budget and operational since June 2021, the project is fulfilling its objectives and shows "the idea works, he said.

Northern countries Norway and Sweden could also partner on offshore wind interconnectors but Norway disappointed developers in February when it said its first offshore wind farms would not be allowed to export power. Equinor, RWE and Norsk Hydro had hoped to develop a project in Norways Soerlige Nordsjoe 2 block near the Danish maritime border to supply Norway and continental Europe but the government is yet to set out the terms.

"This is a case that is quite different from the one that we, Norsk Hydro and RWE have been preparing for," the head of Equinor's renewable energy business, Paal Eitrheim, told Reuters in an interview. If connected to multiple countries, the wind farms could be developed without subsidies, Eitrheim said.

Norway will study the impact of different connection points on the Norwegian power market before deciding on Soerlige Nordsjoe 2, State Secretary in the Norwegian Ministry of Petroleum and Energy Elisabeth Saether told Reuters Events. The decision could be made "by the end of this year," Saether said.

New regulation

To attract wind developers, offshore transmission must be installed on time and on budget and coordination between multiple countries and stakeholders will be a significant challenge. The harsh environment of the North Sea presents design and build challenges and limits the construction window.

To reduce risks, energy regulators will need to set out clear market frameworks and schedules to harmonise the buildout of new wind farms and transmission.

Regulators must implement mechanisms that reduce revenue risks such as grid curtailment and the EC will need to exempt offshore wind interconnectors from existing interconnector capacity allocation rules, a Vattenfall spokesperson said.

One solution could be that [grid operators] guarantee a certain export capacity availability to the connected wind farms, the spokesperson said.

Europe's rush to deploy renewables could distract from offshore grid planning but it could also focus the attention of power authorities.

The rapid synchronisation of the Ukrainian and Moldovan grids with the EU following Russia's invasion of Ukraine showed how European countries can accelerate joint grid projects, Medalova noted.

EU Energy Commissioner Kadri Simson praised the "extraordinary cooperation" of all involved and thanked European transmission operators for doing "a year's work in two weeks to make this happen."

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Reuters Events Energy, a part of Reuters Professional, is owned by Thomson Reuters and operates independently of Reuters News.

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Europe thrusts towards offshore wind grid, testing regulators - Reuters

Governor Kathy Hochul announced the release of New Yorks third competitive Offshore Wind Renewable Energy Certificate (OREC) solicitation on July 27, 2022. Through the solicitation, the New York State Energy Research and Development Authority (NYSERDA) aims to procure at least 2,000 MW, and up to 4,640 MW, of offshore wind energy, enough to power 1.5 million New York homes. Under the New York Climate Leadership and Community Protection Act (CLCPA), New York set a resource target for offshore wind of 9 GW by 2035. The six leases recently awarded in the New York Bight alone are estimated to produce at least 5.6 GW worth of power, and it is expected that multiple New York Bight lessees will bid in New Yorks OREC solicitation.

NYSERDAs previous solicitations include contracts for 1,700 MW of offshore capacity from Equinor Wind US LLC and Sunrise Wind LLC in 2019 and 2,500 MW of offshore capacity from Empire Offshore Wind LLC and Beacon Wind LLC in 2020. The 2020 procurement also secured significant investments, totaling $644 million, in port infrastructure and local manufacturing.

A draft of this solicitation (ORECRFP22-1) was released in March 2022 for public comment, and a follow-up request for information was released in May 2022. In response, NYSERDA received over 1,300 comments from various stakeholders. The 2022 solicitation reflects consideration of these comments and includes several updates from the previous two solicitations. These updates include the following:

NYSERDA has also committed to awarding evaluation points for plans that repurpose existing downstate fossil-based electric generation infrastructure, and for projects that create economic benefits through developing energy storage and other clean energy and decarbonization investments, including pilot and demonstration projects for innovative storage projects.

Eligibility to participate in the solicitation is limited to U.S. offshore wind projects, with a lease from Bureau of Ocean Energy Management (BOEM), operational after January 2015, that demonstrate delivery of electricity into New York. Proposers must also (1) include commitments to negotiate project labor agreements, labor peace agreements, and prevailing wages; (2) submit environmental and fisheries mitigation plans minimizing impacts to fisheries and the environment; (3) participate in New York states offshore wind environmental, commercial fishing, jobs and supply chain, and maritime technical working groups; (4) consult with relevant state agencies around fishing, wildlife, and the environment; (5) make environmental data collected during site assessment publicly available; (6) implement lighting controls to minimize nighttime visibility; and (7) otherwise minimize visual impacts.

NYSERDA will use a scoring system to award contracts based on three components, including (1) project viability (10 points)a non-price evaluation; (2) New York economic benefits (20 points)a non-price evaluation; and (3) offer prices (70 points)a price evaluation. The project viability component assesses whether the proposed project is ready to deploy, technically and logistically feasible, sensitive to the needs of ocean users, and the goals of the CLCPA have been considered. Under the second component, New York economic benefits, proposals will be scored based on their investments into New Yorks economy. Under the third and highest value scored component, proposals will be scored based on their offer pricing structure and price evaluation. As part of the submission, developers must submit (1) a base proposal (which must use either the index OREC or fixed OREC pricing structure) and (2) a stand-alone proposal (which must request no New York state funding and cannot include a SCIP). Stand-alone proposals will be considered after NYSERDA completes the selection of proposals that include SCIPs. Proposers can submit an uncapped number of alternate proposals.

As the NYSERDA solicitation is moving quickly, developers need to be actively engaging with various stakeholders, including underserved communities, fisheries, and environmental groups, and demonstrating this engagement in their proposals. Developers recently awarded leases in the New York Bight also need to pay attention to the intersection between these stakeholder engagement requirements and BOEMs similar lease stipulations requiring engagement with fisheries, coastal communities, environmental and nonprofit groups, and underserved communities, among others, with an initial progress report detailing these efforts due on November 1. For example, BOEMs draft Fisheries Mitigation Guidance will factor in as companies develop their plan for NYSERDAs requirements under Appendix D of the solicitation. Developers must set forth their plans to communicate with commercial and recreational fishermen, a similar requirement to the fisheries communication plan required by BOEM in its lease stipulation and due in advance of the NYSERDA bid deadline. As BOEM moves forward on its Programmatic Environmental Impact Statement for offshore wind energy development in the New York Bight, BOEM should also be considering the impact of the NYSERDA bid within its analysis and the programmatic mitigation measures considered.

Moreover, developers must take note of BOEMs statement that it may condition approval of a construction and operations plan on the incorporation of cable corridors, regional transmission systems, meshed systems, and other mechanisms into the plan. Proposers therefore should consider whether incorporating HDVC technology and a meshed ready grid, as required for the OREC solicitation, will also help them achieve BOEMs ultimate approval of their project.

NYSERDA will host a conference via webinar on August 23, 2022, to address key elements from the request for proposal (RFP) and to provide further information to potential proposers. Proposers can submit written questions through September 16, 2022, and NYSERDA will respond to them in October. Proposers must provide notice of their intent to propose by December 1, 2022, and must register for the NYSERDA Portal by December 15, 2022. Proposals are due December 22, 2022, and NYSERDA expects to award and execute contracts in the first and second quarter of 2023, respectively.

[View source.]

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New York Announces Third Solicitation for at Least 2,000 MW of Offshore Wind - JD Supra

Georgia Ports Authority officials say an offshore bottleneck at the Port of Savannah has peaked.

Incoming holiday cargo and diversions from other ports have caused record volumes and kept ships offshore.

GPA Executive Director Griff Lynch said more than 40 ships were waiting to come into the port Tuesday morning.

"The vessels have plateaued and we have that under control," Lynch said. "We've invested a significant amount of money into creating new capacity on our facilities."

The authority has about $1 billion in projects underway to increase capacity, including new berths and cranes on the ship side.And on land, the port recently completed a massive rail upgrade and announced earlier opening hours for truckers.

It's all designed to ease the bottleneck, which exacerbates supply chain issues throughout the economy.

"This is unprecedented volume," Lynch said. "We just need to continue to build our facilities to increase our capacity to adjust to the new level of volume."

On Monday, GPA announced that July cargo traffic was up 18% over July last year, making it the fastest-ever start to a fiscal year at the Port of Savannah.

The Port of Savannah handled 530,800 twenty-foot equivalent units, or TEUs, a measure of container cargo, last month.

See more here:

Ships wait offshore in bottleneck at Port of Savannah - GPB News

The U.S. Senates passage of the 700-plus-page, omnibus economic and energy Inflation Reduction Act includes $369 billion to advance clean energy programs. This includes offshore wind development and pressing a U.S. transition to electrifying transportation and residential energy use.

The bill now up for approval by the House of Representatives could reduce U.S. carbon emissions by about 40% by 2030, according to Senate Majority Leader Charles Schumer, D-N.Y., a key architect of the narrowly approved (51-50) measure.

It includes $80 million in tax credits and other consumer incentives to encourage people to buy electric vehicles, energy-efficient induction stovetops, home heat pump systems and rooftop solar panels. A much bigger chunk at $260 billion in clean-energy tax credits is targeted at helping renewable energy development grow, from manufacturing components in the U.S. to building projects like offshore wind turbine arrays.

Offshore wind promoters say the legislation would be a big win for them. Extending tax credits for years will help wind developers nervous about the escalating costs of raw materials. The still-developing U.S. offshore wind industry is watching Virginia state utility regulators concerns about Dominion Energys massive Coastal Virginia Offshore Wind project, the biggest to date, which won state approval Friday.

The Senates passage of the Inflation Reduction Act is a watershed moment in Americas renewable energy transition. This historic legislative package sends a message to the world that the U.S. is serious about bolstering supply chain resiliency, increasing American energy security, and reaching our ambitious goal to deploy 30 gigawatts of offshore wind power by 2030, Liz Burdock, president and CEO of the nonprofit advocacy group Business Network for Offshore Wind, said in a statement.

The bill allots $40 billion for investment, including shipbuilding for wind power, that will unleash the vast potential of offshore wind andlocalize a supply chain on American shores creating thousands of good-paying jobs, said Burdock.

Compromises forced on Democratic congressional leaders by Sen. Joe Manchin, D-W. Va., ensured the legislation can allow continuing offshore development of oil and gas production. Environmental groups lobbied the Biden administration hard to prevent it.

But in the end, the package had the all of the above approach to energy taken by the Obama administration a decade before, when it accepted fossil fuel development even while promoting offshore wind potential. Opponents of offshore drilling were unhappy.

Those offshore drilling provisions that benefit the fossil fuel industry ... place an unfair burden on Gulf of Mexico and Alaska communities, said Beth Lowell, the environmental group Oceanas U.S. vice president.

Mandated offshore drilling flies in the face of President Bidens campaign commitment to end new leasing for dirty and dangerous offshore drilling," she said. "New offshore drilling leases compromise efforts to address the climate crisis and wont help lower gas prices. President Biden must reaffirm and uphold hispromise to end new oil and gas leasingby finalizing a five-year program with no new lease sales.

Offshore industry operators saw plenty of opportunity in both old and new energy sectors.

We extend our thanks to Senator Manchin for his leadership in securing an all-of-the-above energy package that boosts offshore oil and gas, offshore wind, and carbon capture and storage all key priorities for the offshore sector and for long-term American energy security, said Erik Milito, president of the National Ocean Industries Association.

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Senate bill passage buoys offshore wind developers and oil - WorkBoat

Ocean GreatWhite Awarded Contract

Three other Rigs Secure Additional Backlog

18% Increase in Contract Drilling Revenue and $26m Increase in EBITDA

HOUSTON, Aug. 9, 2022 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported the following results for the second quarter of 2022:

Three Months Ended

Thousands of dollars, except per share data

June 30, 2022

March 31, 2022

Total revenues

$

205,702

$

186,239

Operating loss

(9,763)

(33,916)

Adjusted EBITDA

15,245

(11,008)

Net loss

(21,929)

(34,354)

Loss per diluted share

$

(0.22)

$

(0.34)

Diamond Offshore also announced contract awards forthe harsh environment semisubmersible Ocean GreatWhite in the U.K. North Sea, the semisubmersible Ocean Apex in Australia, and two 7th generation drillships - the Ocean BlackHornet and a Diamond-managed rig - in the U.S. Gulf of Mexico.These new contracts added approximately $610 million of backlog for the Company. The new contracts are in addition to the $995 million of backlog reported as of July 1, 2022.

Bernie Wolford, Jr., President and Chief Executive Officer, commented, "We are pleased to announce these significant backlog additions. The contract for the Ocean GreatWhite is a testament to the capabilities of this high-specification harsh environment asset and comes at a time when energy security and longer-term demand in the sector are increasingly visible. With the rig now contracted, we will have three assets working in the UK sector of the North Sea, allowing us to better serve our customer base while growing our presence in an established market."

The Ocean GreatWhite was awarded five wells, with an estimated duration of 300 days. Contract commencement is expected in the first quarter of 2023. Total contract value of the committed scope is approximately $80 million. The contract also includes priced options for up to eight additional wells.

The Ocean Apex has been awarded three new contracts for work on the Northwest Shelf of Australia. The first new award commences in the second quarter of 2023, with an estimated duration of 75 days. The second award is also for an estimated duration of 75 days, commencing in direct continuation of the previous award. The third award has an estimated duration of 150 days with a commencement in 2024. The combined awards add approximately $90 million of backlog to the Ocean Apex. Wolford added, "A potential fourth new contract currently under negotiation would fill out the remaining availability in 2023, and combined, keep the rig fully contracted until late 2024."

Story continues

The Ocean BlackHornet has secured a two-year extension with its current client in the U.S. Gulf of Mexico in direct continuation of the rig's current term. The two-year extension will keep the rig working until early 2025. Total contract value for the extension is approximately $290 million.

A Diamond-managed rig has been extended by its current client for work in the U.S. Gulf of Mexico for an additional one-year term in direct continuation of the rig's current term. The contract value for this extension is approximately $150 million.

Wolford noted, "With improved dayrates and approximately 75% of 2023 marketed capacity contracted, we have an opportunity to earn considerably higher margins in 2023. I would like to thank everyone involved in securing this backlog, as these awards are a testament to the class-leading Diamond Offshore brand, our unwavering commitment to HSE, and the hard-working people who contribute to the Diamond Difference."

Second Quarter Results

Contract drilling revenue for the second quarter totaled $177 million compared to $150 million in the first quarter of 2022. The increase in revenue was primarily driven by the Ocean Apex returning to active service under a new contract that commenced in May 2022, completion of shipyard stays for the Ocean Endeavor and Ocean Patriot, and a full quarter of drilling operations for the Auriga. Contract drilling expense for the second quarter was relatively flat at $142 million compared to $145 million in the first quarter of 2022. During the quarter, the Company continued to perform in an exceptional manner, achieving revenue efficiency of 96.3%.

Operational Highlights

After eight years of continuous and exceptional performance, the Ocean BlackHawk completed its inaugural contract in the U.S. Gulf of Mexico. The rig has now mobilized to Senegal to join the Ocean BlackRhino. The Ocean Apex returned to work in May and the Ocean Monarch completed its contract and was cold stacked.

Notably, three of the Company's rigs reached significant safety milestones this quarter, each achieving three years without a recordable incident.

Liquidity and Outlook

As of June 30, 2022, Diamond Offshore had total liquidity of $339 million, comprised of $43 million of unrestricted cash and $296 million of available capacity on its revolving credit facility and delayed draw First Lien Notes.

Commenting on the outlook for the offshore drilling market, Wolford concluded, "The market continues to improve, as reflected by our recent fixtures for both semisubmersibles and drillships across multiple regions. Visible demand, energy security concerns, and tight supply could lead to sustainable demand for our drilling services for years to come."

CONFERENCE CALL

A conference call to discuss Diamond Offshore's earnings results has been scheduled for 8:00 a.m. CDT on Wednesday, August 10, 2022. A live webcast of the call will be available online on the Company's website, http://www.diamondoffshore.com. Participants who want to join the call via telephone or want to participate in the question and answer session may register here to receive the dial-in numbers and unique PIN to access the call. An online replay will also be available on http://www.diamondoffshore.com following the call.

ABOUT DIAMOND OFFSHORE

Diamond Offshore is a leader in offshore drilling, providing innovation, thought leadership and contract drilling services to solve complex deepwater challenges around the globe. Additional information and access to the Company's SEC filings are available at http://www.diamondoffshore.com/.

FORWARD-LOOKING STATEMENTS

Statements contained in this press release that are not historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, any statement that may project, indicate or imply future results, events, performance or achievements, including statements relating to future financial results; future recovery in the offshore contract drilling industry; expectations regarding the Company's plans, strategies and opportunities; expectations regarding the Company's business or financial outlook; future borrowing capacity and liquidity; expected utilization, dayrates, revenues, operating expenses, rig commitments and availability, cash flows, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the effect, impact, potential duration and other implications of the ongoing COVID-19 pandemic; the impact of our emergence from bankruptcy; the offshore drilling market, including supply and demand, customer drilling programs, repricings, stacking of rigs, effects of new rigs on the market and effect of the volatility of commodity prices; expected work commitments, awards and contracts; future operations; increasing regulatory complexity; general market, business and industry conditions, trends and outlook; and general political conditions, including political tensions, conflicts and war. Forward-looking statements are inherently uncertain and subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those anticipated or expected by management of the Company. A discussion of certain of the risk factors and other considerations that could materially impact these matters as well as the Company's overall business and financial performance can be found in Item 1A "Risk Factors" in the Company's most recent annual report on Form 10-K and the Company's other reports filed with the Securities and Exchange Commission, and readers of this press release are urged to review those reports carefully when considering these forward-looking statements. Copies of these reports are available through the Company's website at http://www.diamondoffshore.com. These risk factors include, among others, risks associated with worldwide demand for drilling services, levels of activity in the oil and gas industry, renewing or replacing expired or terminated contracts, contract cancellations and terminations, maintenance and realization of backlog, competition and industry fleet capacity, impairments and retirements, operating risks, litigation and disputes, permits and approvals for drilling operations, the COVID-19 pandemic and related disruptions to the global economy, supply chain and normal business operations across sectors and countries, changes in tax laws and rates, regulatory initiatives and compliance with governmental regulations, casualty losses, and various other factors, many of which are beyond the Company's control. Given these risk factors and other considerations, investors and analysts should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this press release, and the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

Three Months Ended

June 30,

March 31,

2022

2022

Revenues:

Contract drilling

$

176,879

$

150,252

Revenues related to reimbursable expenses

28,823

35,987

Total revenues

205,702

186,239

Operating expenses:

Contract drilling, excluding depreciation

142,150

144,902

Reimbursable expenses

28,554

35,613

Depreciation

25,693

26,952

General and administrative

19,753

16,732

Gain on disposition of assets

(685)

(4,044)

Total operating expenses

215,465

220,155

Operating loss

(9,763)

(33,916)

Other income (expense):

Interest income

1

Interest expense

(10,103)

(8,325)

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Diamond Offshore Reports Second Quarter 2022 Results and Announces $610 Million in New Contract Awards - Yahoo Finance