Offshore staff
EL DORADO, Arkansas – Murphy Oil Corp. has sanctioned the King’s Quay FPS, Khaleesi/Mormont, and Samurai field developments in the deepwater Gulf of Mexico, the company revealed in its 2Q results statement.
The King’s Quay FPS facility will receive and process up to 80,000 b/d of oil production anchored by the Khaleesi/Mormont and Samurai developments. It is expected to be in service in mid-2022.
Khaleesi/Mormont field development includes seven subsea wells, of which four were previously drilled, and infrastructure tieback to King’s Quay. Khaleesi is in Green Canyon block 390 and Mormont is in Green Canyon block 478.
The Samurai field in Green Canyon block 476 will be developed as a four-subsea well tieback to King’s Quay.
President and CEO Roger W. Jenkins said: “Our planned execution on our new Gulf of Mexico revitalized asset base continues. These projects have outstanding returns offering high-margin production and a free cash flow runway going forward… This new FPS asset could be easily monetized, and we are currently evaluating all our options.
“We forecast first production from the FPS along with our two new fields in mid-2022. Initial production from these assets is expected to exceed 30,000 boe/d net at first oil.”
Wood Mackenzie analyst Mfon Usoro said: “Murphy’s sanction of the trio of projects including the King’s Quay facility, Khaleesi/Mormont, and Samurai shows that the Gulf of Mexico still offers attractive investment opportunities. The Gulf of Mexico has evolved since the downturn to shorter cycle projects and a leaner development approach which has led to lower breakevens and higher returns.”
Wood Mackenzie estimates a lead time for King’s Quay of five years from discovery to first oil. According to Usoro, this is exceptionally quick and is roughly half the average lead time of a greenfield development in deepwater Gulf of Mexico.
The analyst values Khaleesi/Mormont and Samurai at more than $2 billion (NPV 10), and each project has a development-cycle breakeven less than $35/bbl (PV 10, Brent).
“The FID of the King’s Quay facility is particularly significant because it is one of only three greenfield projects in deepwater Gulf of Mexico that have achieved FID since the downturn,” added Usoro. “With a new platform set to enter the Gulf of Mexico, it offers up opportunities to commercialize more small-scale subsea tiebacks with higher returns.”
In addition, during 2Q, Murphy drilled and completed the Dalmatian #2 well in Desoto Canyon block 4. First oil is expected in 4Q. Also, additional wells were brought online at the non-operated Lucius field.
At the end of the quarter, the Hoffe Park #2 well in Mississippi Canyon block 122 encountered oil in multiple zones and is completing the evaluation of the well.
In 3Q, the company expects to complete the Nearly Headless Nick well in Mississippi Canyon block 387, which will tieback to the Delta House FPU. First oil is expected in 4Q.
Additionally, the company plans to initiate a workover at the Chinook #5 well in Walker Ridge block 425 and expects to bring the well online in 1Q 2020.
Offshore Mexico, Murphy entered an agreement to acquire a proportionate share of Ophir’s interest in block 5 for approximately $15 million, resulting in 40% working interest, with Petronas and Wintershall DEA each increasing their ownership to 30%. This transaction remains subject to regulatory approval.
The company has also initiated seismic reprocessing of both the Cholula Area and the western subsalt portion of the block.
08/08/2019
