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Gulf of Mexico: Stone Energy Hires Ensco Semi

Stone Energy  has contracted an ENSCO 8500 series dynamically positioned deep water drilling rig for Stone’s Cardona oil development program at Mississippi Canyon 29.

Drilling on the first Cardona well is expected to commence during the second half of 2013 followed by the drilling of the Cardona South well. Stone plans to tie back both wells to the 100% owned Pompano platform with production projected for late 2014. Stone holds a 65% working interest in the Cardona wells and will be the operator.

Chairman, President and CEO David Welch stated, “The signing of the Ensco contract allows us to move forward to more fully develop the reserves around the Pompano platform. These Stone-operated deep water wells allow us to be in control of the planning and timing of the Cardona project. After years of preparation, we look forward to progressing our deep water development and exploration efforts.”

Separately, the ENSCO 81 jack-up rig is expected to begin drilling on a three to four well conventional shelf/deep gas drilling program in May 2013. Stone expects to drill the Hammerlock oil prospect located on South Timbalier 100, followed by the Taildancer oil prospect located on Ship Shoal 113. The remaining one or two wells will follow Taildancer. Also in May 2013, the Parker 50B inland barge rig is expected to spud an infield oil well prospect in the Stone-operated Clovelly field. Stone holds a 94% working interest in Hammerlock and a 100% working interest in Taildancer and Clovelly.

At the La Cantera liquids-rich deep gas field, the third well was successfully drilled to 18,000 ft and is currently in completion operations with first production expected in June 2013. Combined with the first two wells, gross production from this field is projected at over 100 MMcfe per day (over 25 MMcfe per day net) when the third well commences production. Stone holds a 34.6% non-operated working interest in the field.

Drilling operations at the deep water Malachite prospect located on Mississippi Canyon 258 are complete. The well has been logged and marginal hydrocarbons were found in several sands. The partners have decided not to proceed with the project and the well is currently being plugged and abandoned. Stone holds a 40% non-operated working interest in the prospect and the net well cost is estimated at approximately $22 million.

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USA: Stone Buys Anadarko’s Pompano Field Stake

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Stone Energy Corporation has acquired Anadarko’s 25% working interest in the five block deep water Pompano field in Mississippi Canyon, a 22% working interest in Mississippi Canyon Block 29, and a 10% working interest in portions of MC 72.

The purchase price under the agreement is $67 million in cash plus the assumption of asset retirement obligations, subject to customary closing adjustments. Current net production from the Pompano field attributable to this acquisition is approximately 1,000 barrels of oil per day and 3 million cubic feet of natural gas per day.

Stone’s estimate of proved reserves attributable to this acquisition is approximately 5.9 million barrels of oil equivalent at December 31, 2011.

In late December 2011, Stone Energy also bought BP’s 75% operated working interest in the Gulf of Mexico located field.

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USA: Stone Energy Buys Interest in Pompano Field from BP

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Stone Energy Corporation today announced the closing of the previously announced acquisition of deep water assets from BP Exploration & Production Inc. (BP), which include BP’s 75% operated working interest in the five block deep water Pompano field in Mississippi Canyon, a 51% operated working interest in the adjacent Mississippi Canyon block 29, a 50% non-operated working interest in the Mica field, which ties back to the Pompano platform, and interests in 23 deep water exploration leases located in the vicinity of the Pompano field.

The stated purchase price of $204 million was adjusted under the agreement to $167.6 million, after adjusting for the effective date of July 1, 2011. The final purchase price is subject to further adjustments for the subsequent period through the closing date.

Stone’s preliminary review of the estimated proved reserves relating to the acquired properties indicated estimated proved reserves of approximately 17 million barrels of oil equivalent (Boe) as of December 28, 2011, which were approximately 83% oil. Stone’s preliminary estimate of the asset retirement obligation associated with the properties is approximately $60 million. The Pompano platform is a production hub with seven producing leases, currently producing at an average rate of approximately 3,300 Boe per day, net to Stone. The production hub has production capacity of 60,000 barrels of oil per day and 135 million cubic feet of gas per day, which could allow for potential processing of additional third party production.

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USA: BP Sells Stake in Pompano and Mica Offshore Fields to Stone Energy

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BP revealed on Friday the agreement to sell its interests in the Pompano and Mica fields in the deepwater Gulf of Mexico to Stone Energy Offshore, LLC, a subsidiary of Stone Energy Corp. for $204 million in cash.

The agreement includes the sale of BP’s 75 per cent operated working interest (WI) in the Pompano field and assets and 50 per cent non-operated WI in the Mica field, together with a 51 per cent operated WI in Mississippi Canyon block 29 and interests in certain leases located near the Pompano field.

Completion of the sale is subject to the pre-emption rights of various co-working interest owners. The companies expect to complete the sale in 2012.

BP group chief executive Bob Dudley said: “We continue to make progress in our divestment programme as we focus on BP’s areas of strength around the world. The sale of these mature assets will allow us to concentrate our efforts on the major production hubs and significant growth opportunities that BP has in the Gulf of Mexico.”

On completion of the transaction BP will continue to operate seven production platforms in the Gulf of Mexico, producing from some of the largest deepwater oil and gas fields ever discovered. Among BP’s Gulf of Mexico assets are the giant fields Thunder Horse, Atlantis and Mad Dog, each of which have long production profiles and development programs.

The Pompano Field is eight miles long, located within water depths ranging from 1,100 feet to 2,200 feet. Given the distance and depth range, the Pompano owners elected to use proven technology and placed a fixed platform in shallow water at the northern end of the field.

Both the Pompano and Mica fields produce oil and gas through the Pompano platform, approximately 120 miles southeast of New Orleans. First oil was produced from the Pompano field in October 1994 after being discovered by BP and Kerr-McGee in 1985. The Mica field, tied back to the Pompano platform some 29 miles to the north west, began production in 2001.

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