GULF OF MEXICO

Jennifer E. Smith
Houston

This table shows drilling in the US Gulf of Mexico for 1995-1997, and a comparison of drilling to Sept. 1997 and 1998. Note that the "all others" category is rising steadily, whereas the top operators' activity has fallen off by about 80 wells from this time last year [37,567 bytes].
This map shows the greater Llano area, which is estimated to contain 1 Bbbl, and the promising prospect Mason, located nearby [7,717 bytes].

EEX commences definition of giant Llano prospect

EEX spudded recently Llano 2, its second well on one of the largest deepwater discoveries in the US Gulf of Mexico. Drilling will commence through first quarter 1999. Llano is located in Garden Banks 386. EEX estimated the reserves in place for the greater Llano area at more than 1 billion bbl. The greater Llano area consists of nine contiguous Garden Banks blocks - 385, 386, 387, 388, 342, 344, 345, 346, and 390.

Production may be tied back to the floating production system on the Cooper Field in Garden Banks Block 388. EEX also indicated a decision would soon be made when to drill the Mason prospect, located on Garden Banks Block 562, where EEX holds a 40% interest.

Analyst: drilling drops among majors, surges among independents

Although the top 41 US Gulf operators drilled 80 fewer wells for the first eight months of this year than they did for the same period last year, other companies drilled 30 more than they did last year, according to figures provided by industry analyst Jim Dodson (see table).

After the market reached a choke point of $13/bbl of oil and as low as $1.73/ MMbtu this summer, "Some operators felt that return on new drilling investment was going to be marginal," he said. In some cases, the money expected to be allocated to drilling in 1998 dried up, and some companies are just saving money for next year, he says.

But he attributes the upward surge in drilling among other companies to the drop in day rates, citing that some jackup rates are now one-third of what they were earlier in the year. Those companies that are continuing or expanding their planned drilling for this year will have a quick payout once prices do get better, having the jump on companies that put it off.

In any case, Dodson predicts that 1999 will be a good year for deepwater drilling, and not too shabby for the shelf. His forecast includes 200 new wells in deepwater Gulf of Mexico, and as many as 900 on the shelf.

MMS estimates shut-ins for weather

The US Minerals Management Service said this year's hurricane season took a heavy toll on production from the US Gulf of Mexico. Companies reported to the MMS that 1998's four major storms - Earl, Frances, Georges, and Hermione - caused 146 rig evacuations and 781 platform evacuations.

The production lost from platform shutdowns totaled 20.5 Bcf of gas and 1.7 million bbl of oil. However, since reporting is voluntary, the effects may have been much greater. The MMS said that for Georges alone, possibly as much as 100% of the 1.1 million b/d of oil and 60-70% of the 14.4 MMcf/d of gas produced in the US Gulf of Mexico was shut in for one day or more.

E & P BRIEFS

High Island 86 No. 1 well was drilled to TVD of 10,689 ft and logged 40 net ft of gas pay in three sands. The well is being completed now, and first production is anticipated in late first quarter 1999. Apache operates this well, and Remington Oil & Gas owns a 33% working interest.
A well on the Boomslang Prospect on Ewing Bank 994 found 185 net ft of oil pay in three separate zones: 7,133 ft to 7,204 ft; 8,580 ft to 8,825 ft; and 12,473 ft to 12,956 ft. The well is located in water depth of 850 ft. Murphy operates the block with 45% interest; Callon Petroleum holds 35%; and Santos USA holds 20%.
Anadarko said its subsalt field discovery Tanzanite tested at 21,917 b/d of 21.9 degree API oil and 29.7 MMcf/d of solution gas from one 50-ft interval through a 1.25-in. choke with flowing tubing pressure of 2,679 psi. Anadarko said this is the highest flow rate it's ever achieved and one of the highest flow rates in the shallow waters of the Gulf of Mexico. Tanzanite is on Eugene Island 346 in 314 ft of water. Design for the production platform is under way and the construction contract is being negotiated. It is planned that the platform should be ready in 24 months, with first production in the third quarter 2000. A statement said that Anadarko will set a sea-floor drilling template on location and has contracted with Rowan to drill the first development well in the next two weeks. Anadarko owns 100% of the field.
The Baldpate platform in the Gulf of Mexico came onstream at 2,000 b/d of oil and 8 MMcf/d of gas. Production is expected to reach 75,000 boe/d by next spring. Baldpate compliant tower production facility is located on Garden Banks 260 in 1,650 ft of water. The company also said that the nearby Penn State Shallow reservoir is now being developed as a subsea tieback to Baldpate and should come onstream by year-end. The nearby Penn State Deep was also a discovery, a statement said. Amerada Hess operates Baldpate with 50%, and Oryx holds 50%.