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Updated: 6th January 2019 13:07

Niko gets rig for Indonesia drilling

Petroleum company Niko Resources of Calgary can start deepwater drilling off Indonesia next year after signing a contract for the use of a drilling rig.

Petroleum company Niko Resources of Calgary can start deepwater drilling off Indonesia next year after signing a contract for the use of a drilling rig.

The four year deal is worth more than $700 million, including a one-year option.

"This is the largest deepwater exploration contract in the history of Indonesia and will dramatically increase Indonesia’s opportunities for major hydrocarbon discoveries in deepwater," the company said in a news release Tuesday.

Niko stock closed up $2.86 or 5.3 per cent to $57.25 in TSX trading.

The contract ensures the company will have a rig for its "planned massive drilling campaign."

Niko is Indonesia’s largest deepwater acreage holder, with an interest in 16 production sharing contracts. It will use the Ocean Monarch rig provided by Diamond Offshore of Houston to explore drilling its acreage.

Niko said it has assembled a team which has drilled more than 150 deepwater wells worldwide.

The contract will start next summer, after the rig finishes its current contract and a required hull inspection.

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