Blog Archives

Gulf of Mexico: MMR’S Moffett Keeps His Eyes on the Prize at Davy Jones

Joan Lappin, Contributor

Greetings from Denver and the EnerCOMConference where McMoRan presented on 8/13. It’s interesting to observe that as we really near the end of problem solving at Davy Jones, investors are so shell shocked they can’t believe the flow test might really happen soon. Many cannot see the forest for the trees or the enormity of this Shallow Water Ultra Deep play vs. the limited prospects of the shale plays they love so dearly. Most shale wells are unimaginative step out wells a short distance away from other known discoveries. Many of the public shale players are recent arrivals in those plays and are paying the price for being followers, not leaders. Their potential returns on invested capital are tiny compared to the potential enormity of the Shallow Water Ultra Deep which can totally transform the U.S. energy picture for the future.

Add to that MMR’s Main Pass Energy Hub where it has reapplied for an export permit to use this facility 20 miles offshore to export hydrocarbons to other parts of the world where gas prices are far above the current <$3 in the United States.

Nobody on earth wanted to have flow tested this well prior to this EnerCOM energy gathering more than Moffett so that this might have been the finest champagne party of this century. Instead, after almost a year of delays, Davy Jones is still not giving up its bounty without a final fight. So, the flow test is still to come.

Jim Bob Moffett stood resolutely in the break out session and at the McMoRan dinner last night and patiently answered the same questions again and again. What about your balance sheet? Aren’t you going to run out of money? Do you honestly think you will have a successful flow test? Is there really permeability in these rocks? How big is this play? Really? Ironically, the well wants to flow so much that the latest problems have revolved around containing the flow, not encouraging it.

As future well completions in the Shallow Water Ultra Deep move forward, rest assured there will be a whole series of protocols that will be standard operating procedure. For one thing, wells will never again be designed to have tiny pipe at the bottom of the hole, making all efforts difficult because there is no room to maneuver tools and equipment. Wells surely won’t be using Schlumberger’s remote control small guns to perforate the casing. The folks at BOEMRE won’t be requiring the interruption of a flow test to move the rig back off the well. And wells will have packers routinely placed at the bottom of the production tubing so that no matter what comes flowing up after perforation of the well, it can easily be contained and controlled. Moffett takes responsibility on himself for not foreseeing that the original multiple O ring type assembly currently being pulled out of the hole would have to contain a far larger perforation project than originally conceived for one zone at a time instead of what resulted from perforating all zones at once. These recent completion activities and “redos” at Davy have cost the group another $70 million. You can’t sue the Government but one wonders what culpability might be laid at Schlumberger’s feet when all the dust settles.

Halliburton’s Boots and Coots pressure control experts are finally off the well. So we can presume that the final preparations for the flow test are now underway. If you look at Moffett’s latest presentations, I believe the slides and cartoons are aimed not at the public markets but at the huge investors who will soon be coming out of the woodwork to turn this into a full blown commercial development to rival the biggest and most important energy projects in the history of the U.S. oil and gas industry.

Many of the folks in the room, some of whom control or influence vast pools of money, don’t seem to see the forest for the trees or grasp what is coming about here. At the conference, if you go into the presentation rooms of those producing from shale plays onshore in the various parts of the country, there is standing room only, just as there was last year. Those investors don’t seem too concerned that shale requires $5-7 gas to be profitable in the present $3 world for natural gas prices. They don’t seem afraid of the write downs of reserve values that are coming at the end of the year. They only seem to focus on the $300 million + cost of Davy Jones and are sure that it will never produce economically. They don’t understand that at some point DJ became a science experiment for the entire play and its proof of concept.

A major topic at dinner was about the cost of future wells. Moffett seems particularly happy with future use of expandable liner to limit the starting size of pipe that must be used. He thinks future wells, particularly those on land at Lineham Creek (Chevron is the operator) and at its new huge Highlander prospect onshore where it will be the operator, can be brought in for $75 million per well. Everything on land is much cheaper from land rigs, or even barge rigs in the swamp areas where there is less than 10 feet of water, to not needing support helicopters and delivery boats. Also, onshore with some of the targeted formations closer to the surface, the support costs are much less, too. Even offshore wells will be far cheaper going forward even if more than $100 million.

Energy XXI, MMR’s junior partner, and Tex Moncrief are reportedly on pins and needles with the rest of us but with no wavering in their conviction about the Ultra Deep. Fortunes are made with patience and by leading, not following, the pack. This group fits that description in spades. Moncrief loves to tell the story of getting hooked on the oil patch when out with his Dad as a young boy in a pair of rubber boots watching a well start to gush oil into the air. Davy is trying to gush, too. It shouldn’t be long now until all the believers get their reward, including the public shareholders.

Joan E. Lappin CFA Gramercy Capital Mgt. Corp.

Source

USA: McMoran Reports Flare from Davy Jones

image

McMoRan Exploration Co. announced yesterday continuing progress to flow test the Davy Jones No. 1 well on South Marsh Island Block 230. As previously reported, McMoRan saw positive pressure response from the Wilcox “D” sand which was perforated on March 24, 2012.

On March 26, 2012, McMoRan attempted to perforate the Wilcox “C” sand. As the perforating gun was being removed from the hole, the well began to flow. When the gun was brought to the surface, it was determined that the gun did not fire in the Wilcox “C” sand from what appears to be a simple disconnection of the detonator cord. McMoRan plans to use a new perforating gun to complete the testing of the Wilcox “C” sand.

Currently, the test is ongoing from only the Wilcox “D” sand, which resulted in the flare. The flow from the “D” sand is being affected by considerable debris in the 5 inch liner, from what McMoRan believes to be residual drilling fluid from drilling of the well. Results of a clean flow test, as opposed to the current test hampered by debris, will be announced as further progress is achieved and flow rates are measurable. McMoRan will provide updates as completion operations progress.

image

Davy Jones involves a large ultra-deep structure encompassing four OCS lease blocks (20,000 acres). McMoRan is the operator and holds a 63.4 percent working interest and a 50.2 percent net revenue interest in Davy Jones. Other working interest owners in Davy Jones include: Energy XXI (15.8%), JX Nippon Oil Exploration (Gulf) Limited (12%) and Moncrief Offshore LLC (8.8%).

McMoRan Exploration Co. is an independent public company engaged in the exploration, development and production of natural gas and oil in the shallow waters of the GOM Shelf and onshore in the Gulf Coast area.

Source

Worldwide Field Development News Dec 30 – Jan 5, 2012

Norway-Det-Norske-Pens-Important-Jette-Field-Deals

This week the SubseaIQ team added 1 new projects and updated 16 projects. You can see all the updates made over any time period via the Project Update History search. The latest offshore field develoment news and activities are listed below for your convenience.

Africa – Other
BG Group, Ophir Commence Drilling Program Offshore Tanzania
Jan 3, 2012 – BG Group has commenced exploratory drilling in Block 1 offshore Tanzania using the Deepsea Metro-1 (UDW drillship). The first three wells in the program will be Jodari-1, Mzia-1 and Papa-1. The operator will drill the Mzia-1 top hole section first, as part of a batch drilling program, then the rig will move to drill Jodari-1 in its entirety, before returning to Mzia-1 to complete the bottom portion of the well. Ophir spudded the Mzia-1 well in 4,921 feet (1,500 meters) of water on Jan. 1, 2012, which should take seven to 10 days. The operator will then spud the Jodari-1 well in a water depth of 3,789 feet (1,155 meters) and drill to total depth of 15,092 feet (4,600 meters) in 40 days. The Jodari prospect contains multiple stacked targets in both the Tertiary and Cretaceous sections with the former having seismic flat spot and amplitude fit to structure. Jodari is modeled to contain mean resources of 2.2 Tcf in the stacked targets. BG Group operates the blocks with a 60 percent stake; while Ophir holds the remaining interest.
N. America – US GOM
McMoRan Drills Ahead in Blackbeard East Well
Jan 5, 2012 – McMoRan has reached a true vertical depth of 33,400 feet (10,180 meters) in the Blackbeard East by-pass well, and logging operations for the section below 30,800 feet (9,388 meters) are under way. Wireline logs indicated that Blackbeard East encountered hydrocarbon bearing sands in the Oligocene with good porosity below 30,000 feet (9,144 meters). The well previously encountered 178 net feet (54 meters) of hydrocarbons in the Miocene sands above 25,000 feet (7,620 meters). Pressure and temperature data below the salt weld between 19,500 feet (5,944 meters) and 24,600 feet (7,498 meters) at Blackbeard East indicate that a completion at these depths could utilize conventional equipment and technologies. The Blackbeard East exploration well lies in 80 feet (24 meters) of water on South Timbalier Block 144. McMoRan operates the block, holding a 38.5% interest; PXP holds 31.5%; EXXI holds 18.0%; W.A. “Tex” Moncrief, Jr. holds 10%; and a private investor holds 1.6%.
Project Details: Blackbeard East
McMoRan Completes Activities at Davy Jones Discovery
Jan 5, 2012 – McMoRan is moving forward with completion activities of the Davy Jones No. 1 discovery well at South Marsh Island Block 230 in the GOM. Installation of the central processing facility for the Davy Jones No. 1 well and sales pipelines were completed. The operator plans to proceed with the completion and flow testing of the well once the wellbore is cleared. Once a flow test is completed, McMoRan expects first production from the well to be established. As previously reported, McMoRan has drilled two wells on the field. The operator expects to complete and flow test both wells in 2012. Davy Jones is located on South Marsh Island Block 234 in 20 feet (6 meters) of water. McMoran operates the block, holding a 32.7% interest; PXP holds 27.7%; EXXI holds 15.8%; Nippon Oil holds 12%; W.A. “Tex” Moncrief, Jr. holds 8.8%; and a private investor holds the remaining 3% interest.
Project Details: Davy Jones
Africa – West
Shell Resumes Bonga Production
Jan 5, 2012 – Shell has restarted production at its Bonga oil field offshore Nigeria, after an oil leak was detected. The facility was closed after a leak during a tanker loading operation on Dec. 20, leading to a serious oil spill, announced Dow Jones newswires. Shell says it completed the clean-up from the spill and resumed output on Jan. 1 at the 200,000 bopd oil field. The Bonga field is located 75 miles (120 kilometers) offshore Nigeria in Oil Prospecting License 212. SNEPCo (55%) under a Production Sharing Contract with Nigeria National Petroleum Corporation (NNPC) operates Bonga.
Project Details: Bonga
Maersk Hits Oil Pay in Pre-Salt Well in Angola
Jan 4, 2012 – Maersk Oil and partners have made a discovery in the Azul-1 deepwater exploration well in Block 23 in the Kwanza Basin offshore Angola. Azul-1, drilled in a water depth of 3,028 feet (923 meters), reached a final depth of 17,500 feet (5,334 meters). The condition of the well prevented an assessment of flow capacity by a conventional test, which was performed as a mini-DST. This test enabled the recovery of two good quality oil samples. Maersk says the preliminary interpretation of the data indicate a potential flow capacity greater than 3,000 bopd. The operator will further evaluate the results of the discovery and will proceed with exploratory work in the block. Maersk Oil is the operator of Block 23 with a 50 percent interest. Partners in the block consist of Svenska (30 percent) and Sonangol (20 percent).
Ophir Targets March to Conduct Appraisal Drilling in Block R
Jan 3, 2012 – Ophir Energy expects to secure a rig to commence a three-to-four well drilling program in the extended Block R offshore Equatorial Guinea. The program, which is designed to demonstrate sufficient gas volumes to underpin a planned second LNG train in Equatorial Guinea, will include one or more appraisal wells on Ophir’s Fortuna-1 discovery, plus exploration wells on the Tonel and Silenus prospects. Drilling should commence in late March. Ophir believes that the gas volumes in Block R are likely to range between 2 to 4 Tcf with additional upside potential in as-yet untested play types. Ophir operates the block with an 80 percent stake.
Seismic Program Commences Offshore Gabon
Jan 3, 2012 – Ophir Energy has commenced a 3D seismic program in the Mbeli and Ntsina licenses offshore Gabon. The operator is acquiring 518,921 acres (2,100 square kilometers) of data, which should take 42 days to complete. The survey is specifically designed to mature pre-salt targets for drilling in late 2012. Ophir operates the licenses with a 50 percent interest; while Statoil holds the remaining interest.
Kosmos Plans to Further Appraise Teak in 1Q12
Jan 3, 2012 – Kosmos Energy plans to commence appraisal drilling on the Teak-4 well in first quarter 2012. Teak is located in the West Cape Three Points Block, which Kosmos Energy operates with a 30.875 percent interest. Partners in the license include Anadarko Petroleum (30.875 percent), Tullow Oil (26.396 percent), Sabre Oil & Gas (1.854 percent) and Ghana National Petroleum (10 percent).
Project Details: Teak
S. America – Other & Carib.
BPZ Energy Plans to Install 2nd Platform on Corvina Field in 2H12
Jan 5, 2012 – BPZ Energy expects to install the new CX-15 platform on the Corvina field and begin a development drilling campaign in the second half of 2012. Two wells are scheduled to be completed during 2012 with first oil production expected in the fourth quarter. The Corvina oil and gas field is situated in the offshore Block Z-1 in northwest Peru. BPZ Energy operates the field with a 100% interest in the license.
Project Details: Corvina
Rockhopper Completes Sidetrack
Dec 30, 2011 – Rockhopper Exploration has completed coring and logging operations at well 14/15-4z in the Falkland Basin. The sidetrack well, about 41 feet (12.5 meters) from the main wellbore, reached a total depth of 8,383 feet (2,555 meters) MD. A total of 377 feet (115 meters) of core was cut through the hydrocarbon-bearing Beverley, Casper South, Casper and Sea Lion reservoirs bringing the total amount of core cut during the entire drilling campaign to 1,493 feet (455 meters). Rockhopper says that drilling of the well has completed the commitments required to earn the 60 percent interest and operatorship of license PL004b. The well will now be plugged and abandoned.
Project Details: Sea Lion
Australia
Apache Plans to Appraise Zola in 2012
Jan 3, 2012 – Apache plans to acquire new 3D seismic data over the Zola gas discovery, located in WA-290-P, in June 2012 with processing to follow. Appraisal drilling is set to follow. The field is located in a water depth of 935 feet (285 meters) offshore Western Australia. Apache operates the permit, holding a 30.25% interest.
Project Details: Zola
Europe – North Sea
Aker to Supply Production System for Boyla Development
Jan 5, 2012 – Marathon awarded Aker Solutions a contract to supply a subsea production system for the Boyla (formerly Marihone) development in the Norwegian sector of the North Sea. The scope of work includes engineering, procurement, construction and delivery of four subsea trees, four over-trawlable subsea structures and control systems. Final deliveries will be made in 1Q 2013. The Boyla field, located in Production License 340 in 394 feet (120 meters) of water, will be subsea tied-back to the Alvheim FPSO. Marathon operates the project with a 65 percent interest; while ConocoPhillips holds 20 percent; and Lundin holds 15 percent.
Project Details: Alvheim
Statoil Finds More Oil in Gullfaks Area
Jan 5, 2012 – Statoil found more oil in the Skinfaks South field in the Norwegian sector of the North Sea. The operator confirmed the discovery of light oil in Middle Jurassic reservoir rocks (Brent group) and an 262-foot (80-meter) high column in good-quality reservoir rocks. Drilled to a vertical depth of 12,211 feet (3,722 meters), the well concluded in the Drake formation in Middle Jurassic rocks. The field is located on Block 33/12, directly west of the Gullfaks field in the Tampen area. Serving as operator of the block is Statoil with a 70 percent interest; while Petoro holds the remaining interest.
Project Details: Greater Gullfaks Area
Noreco Divests Interests in PL 435
Dec 30, 2011 – Norwegian Energy Company (Noreco) has completed the sale of its interest in license PL 435, containing the gas discovery Zidane-1, to OMV. Noreco is also under certain conditions entitled to an additional consideration if a discovery is made in the upcoming exploration well Zidane-2. The license contains the Zidane-1 gas discovery, which was made in 2010, and is estimated to contain between 5 and 18 Bcm of recoverable gas.
Project Details: Zidane
S. America – Brazil
Petrobras Signs Lease, Operating Contract for Marlim Sul FPSO
Jan 5, 2012 – SBM Offshore has received an extension of 26 months for the lease and operating contract of the Marlim Sul FPSO from Petrobras. The extension begins in April 2012, at the end of the initial lease period, which was eight years. The vessel is capable of processing 100,000 bopd and 2.3 MMcm/d of gas compression. The produced gas is exported through Campos Basin pipelines. The vessel is moored in a water depth of 4,692 feet (1,430 meters), and has five oil producers and four water injectors tied-back to the FPSO.
Project Details: Marlim Sul (South)
Petrobras Finds Light Oil in Golfinho Concession
Jan 3, 2012 – Petrobras has discovered a light oil and natural gas accumulation in the Golfinho Concession (4-BRSA-1001-ESS) offshore Brazil. The discovery was made during the drilling of well 4-GLF-31-ESS, known as Tambuata, in a water depth of 4,987 feet (1,520 meters). Petrobras will continue to drill the well at a depth of 20,013 feet (6,100 meters) in order to test deeper formations. Reservoirs from the Cretaceous Period, Santonian Age were identified and are already producing in the field, at a depth between 14,862 and 15,322 feet (4,530 and 4,670 meters), stated the operator. The reservoirs are in good condition for production.
Petrobras Submits DOC for Guara Development
Jan 3, 2012 – Petrobras has submitted a Declaration of Commerciality with the Brazilian National Agency of Petroluem, Natural Gas and Biofuels for the accumulations of light oil and gas in the Guara area. This declaration marks the start of the production phase for the field. The consortium will rename the field as Sapinhoa. The consortium drilled four wells in the area, including one well designed for reservoir data acquisition. Drill stem tests were performed on three of the wells. In addition, a five-month extended well test was carried out on the discovery well, confirming the excellent productivity of the Guara reservoir. Data gathered from this test will assist in the optimization of the field development plan. Guara is located in Block BM-S-6 about 186 miles (300 kilometers) off the Sao Paulo state coast. Petrobras serves as the operator of the consortium, holding a 45 percent interest; while BG Group holds 30 percent; and Repsol Sinopec Brazil holds 25 percent.
Project Details: Sapinhoa (Guara)
Petrobras Estimates Guara Presalt Area Holds 2.1B BOE
Dec 30, 2011 – Petrobras estimates that the Guara presalt area holds roughly 2.1 Bbbl of oil equivalent in Brazil’s Santos basin. The new field, located in BM-S-9 block, is formed by reservoirs of high-quality oil. Petrobras sent a declaration of viability to Brazil’s national oil regulator, ANP, a year ahead of the deadline it was given. The company plans to submit a development plan to the organization in February.

Source

Gulf of Mexico True Believers on Pins and Needles as McMoRan completes Davy Jones

image

Davy Jones Production Platform

Joan Lappin, Contributor

A lot is happening in the Shallow Water Ultra Deep drilling program that McMoran and its astute partners, Energy XXI and Tex Moncrief, have been pursuing for the last few years.  Now that the U.S. space shuttle program has come to an end, the scientific frontier in this country has moved to drilling miles into the earth’s crust instead of launching men to the moon. Those over 50 are old enough to remember the tension everyone in America felt as the first U.S. spacemen disappeared around the back of the moon and were temporarily out of communication with the Mission Control Center in Houston. Nobody knew if they would continue past the moon and out into space or circle back around into view as planned.

These days the exploration frontier is 30-35,000 feet below the mudline in the Gulf of Mexico.  Petroleum engineers are designing tools and rigs to control the 400 degree temperatures and 20,000 and more lbs. of pressure being encountered by drill bits and logging tools working 6 miles into the earth.

On September 2, 2009, BP announced a massive oil discovery at its Tiber well in what was then one of the deepest wells yet drilled to a total vertical depth of 35,055’ in 4132 feet of water in the Wilcox and Tuscaloosa formations 250 miles Southeast of Houston.  The discovery was described as having multiple pay zones in the “lower tertiary.”  Kaskida, another BP well was announced as having 800’ of hydrocarbon bearing sands about 45 miles SE of Tiber.  Neither of these wells is in production and it is likely to be many years and many billions of dollars spent to build pipelines and solve lifting problems before they are.

In contrast, the Davy Jones 1 well was announced as a discovery by McMoRan and its partners in January 2010, just a few months after the Tiber discovery.  It is about to come online and into production almost any day now.  What’s the difference?  DJ1 is in 20 feet of water just off the coast of Louisiana. Drilling for oil and gas in the Louisiana almost swamp land has been going on for decades.  There are existing pipelines all over the place.  The production platform pictured above is in water that a tall NBA player could almost stand in and wave his arms above the surface.

So everyone is waiting with great anticipation just as for those astronauts circling the moon for the first time decades ago.  McMoRan, the operator, had long ago announced expected completion of the well in mid-December 2011 with perforation of the well casing and a flow test to follow shortly thereafter before the end of the year.

Davy Jones and the Ultra Deep wells don’t give up their booty without a fight.  This is no exception.  It is not certain how fast the reaming of the well will proceed. Might be before year end and it might not.  For sure, the goal is to move at the “proper” speed to successfully complete and test the well. No other course would make sense when the well has cost about $170 million so far. Other than satisfying Wall Street, whether the well is completed on December 20th or January 10th is irrelevant. In this case, slow and secure is the way to go.

The real issue since this play began is that for years many of the other oil and gas exploration companies have disparaged the whole idea that anything worth pursuing would ever be found.  Once it was, the next group of naysayers were convinced that like BP’s Tiber and Kaskida, it would be impossible to produce them.  Earlier this year, in an astounding tip of the hat to a small E&P company like MMR, Chevron complimented MMR’s Jim Bob Moffett and elevated the Gulf of Mexico to its top three exploration zones.  Oil folks in the know are no longer putting down this concept that under the exhausted shallow fields in the Gulf and under the salt weld, more hydrocarbons would or could be found.  Now it is accepted that massive amounts might still be found altering our nation’s energy future.

The expectation for Davy Jones 1 is that once the inside of the hole is smoothed (reamed)  new production liner will be placed into the hole. Next the well casing will be perforated to allow production to begin.  Gas and hopefully some liquids too, will come surging up the well. There is a range of estimates but some folks believe that as the well is perforated from the bottom up, the initially activated zones will begin producing 20 MMcf per day building to the 50-70 MMcf per day level MMR expects to produce.  Because this well is in a hole originally designed years ago to go to only a 20,000’ depth, its small size limits production to a maximum of 75 MMcf per day. Those constraints will not apply to Davy Jones 2, drilled 2.5 miles away which was designed from the outset with much larger pipe and to go to a 30,000’ depth. The second  well is due on stream in the second half of 2012, even less time than the two years it has taken to design the equipment needed to bring Davy 1 onstream.

In the world of exploration and production nothing is ever certain. However, MMR expects to have some additional good news to report before year end at either its Lafitte well or at Black Beard East. In all cases, Moffett is looking at both of these wells for the same Wilcox and Tuscaloosa sands such as the Frio which has previously been seen at Blackbeard East and which is a massive producer onshore Louisiana .  This zones have also been seen offshore at BP’s Tiber and Kaskida wells.  Good things are just around the bend but until then, nervous anticipation is the mood of the week.

Joan E. Lappin CFA              Gramercy Capital Mgt. Corp.

In these turbulent times, put our decades of experience to work for your portfolio.  Contact us at info@gramercycapital.com

Gramercy Capital, its clients and Mrs. Lappin own shares in McMoRan and Energy XXI.  They do not own shares in BP or Chevron, also mentioned in this article.

Source

USA: Saratoga, McMoRan in Vermilion 16 Field JV Talks

image

Saratoga Resources and McMoRan Oil and Gas LLC (McMoRan) are in advanced talks regarding a potential joint venture on Saratoga’s Long John Silver Prospect at Vermilion 16 field.

While specific terms of the proposed joint venture are still being discussed and subject to confidentiality obligations, Saratoga anticipates contributing its deep rights (approximately 20,000 feet and below) to approximately 4,000 acres and access to Saratoga’s production and pipeline facilities in Vermilion 16 with McMoRan expected to contribute approximately 6,000 acres to the joint venture. The joint venture objective is expected to target ultradeep shelf Lower Tertiary (Wilcox) and Cretaceous objectives at depths of 23,000-30,000 feet subsea. All of the subject acreage is in Louisiana state waters in Vermilion Parish with water depths ranging from 5-10 feet.

The Long John Silver Prospect is situated in one of the main Lower Wilcox depositional fairways that fed McMoRan’s Davey Jones discovery on the Gulf of Mexico Shelf and the Walker Ridge Wilcox discoveries in Gulf of Mexico Deepwater.

Saratoga will retain its existing rights to all shallower objectives in the subject acreage, including all proved, probable and possible reserves, consisting of 8.7 million barrels of oil equivalent (MMBOE) of proved reserves and 18.6 MMBOE of total reserves at January 1, 2011. Additionally, Saratoga will retain the right to process its production from such shallower objectives at Saratoga’s production and pipeline facilities. Saratoga owns and operates a central production facility in Vermilion Block 16 with production capacity of 100 million cubic feet per day and a two mile pipeline to shore. Saratoga intends to continue its current development plans with respect to its shallower reserves in Vermilion 16, including drilling of development wells commencing in the first quarter of 2012.

Saratoga President, Mr. Andy Clifford, said “We are excited at the prospect of partnering with McMoRan in our ultradeep shelf play. McMoRan’s management team, under the visionary leadership of James Moffett, has established its position as a pioneer and the preeminent player in the ultradeep shelf play. We have gained valuable insights into the ultradeep Wilcox play through our involvement in the University of Texas Deep Shelf Consortium and through my years at BHP Billiton, a participant in the original Blackbeard well and a participant in the Cascade and Chinook Wilcox discoveries in Walker Ridge. We believe our Long John Silver Prospect has similar characteristics to recent high profile Wilcox successes, including McMoRan’s highly acclaimed Davey Jones well. Our 3D mapped deep shelf plays in Vermilion 16 and Grand Bay add exciting potential to our ongoing developmental drilling program.”

Source

Enhanced by Zemanta
%d bloggers like this: