Gulf of Mexico deepwater discoveries survey shows slight decline

Editor's note: This story first appeared in the January-February 2023 issue of Offshore magazine. Click here to view the full issue.

By Bruce Beaubouef, Managing Editor

Operators announced three new discoveries in the deepwater Gulf of Mexico over the past twelve months, representing a decrease as compared to the five deepwater discoveries reported in 2022.

While that decrease may be seen as marginal, the overall number of deepwater discoveries is down significantly in recent years, as compared to the amount seen 20 years ago. In 2003, for example, there were 17 discoveries recorded in the deepwater Gulf of Mexico. That lower level has been driven no doubt by two low oil price shocks in recent years, which in turn has led to lower levels of investment and drilling.

As has often been the case in recent years, the drilling activity has been driven by the larger independents and medium-sized operators, with Talos Energy having two of the discoveries and Hess Corp. having the other.

For Talos, the discoveries came from its Lime Rock and Venice prospects in the Viosca Knoll area. Both discoveries are located near the company’s Ram Powell platform, where the wells were drilled sequentially on the two prospects. Talos estimates gross recoverable resources in the range of 20 MMboe to 30 MMboe, with 40% oil and 60% liquids.

Talos reported that drilling delivered 78 ft and 72 ft of net hydrocarbon pay in the primary targets at Lime Rock and Venice, respectively, with good geological properties, as confirmed by pressure, fluid and core samples.

The company expects to develop both via subsea tiebacks, connected via a shared riser system to the Ram Powell platform, with combined production of 15,000 to 20,000 boe/d. Lime Rock is nine miles from the platform, while Venice is four miles away. Completion operations should follow in the second half of 2023, with first production from both wells expected by Q1 2024.

Talos says that its deepwater drilling campaign will continue this year with wells in the Rigolets and Lisbon prospects, in the Mississippi Canyon area. If these prospects prove commercial, they could be tied into the Pompano platform rig in Viosca Knoll block 989. The company says that it also has plans to drill Venice, another prospect close to the Ram Powell facility.

Hess’s Huron exploration well was spudded last February in Green Canyon block 69. The well, which was drilled to a depth of nearly 29,000 ft, brought “very encouraging results,” according to company COO and president Greg Hill. As reported in an earnings call last July, Hill said that the Huron well had targeted a new Miocene subsalt fairway in the Northern Green Canyon area, and Hess had discovered “high-quality oil in good quality Miocene sands.” Hess is now planning an appraisal sidetrack on Huron, and the company is optimistic that the well will open up additional opportunities in the Northern Green Canyon area.

Gulf E&P on the rebound

Despite the decrease in announced new discoveries, Gulf E&P activities in general are expected to be ramping up in the new year.

For example, W&T Offshore recently reported that FEED and permitting processes are underway for the Holy Grail well on the Magnolia field at Garden Banks 783. The company says it expects to activate and mobilize a drilling rig in the first half of 2023, with drilling starting during the second quarter. W&T also says that it recently performed two recompletions and five workovers on its GoM fields, and it plans further recompletions and workovers in the coming year.

Meanwhile, Kosmos Energy recently provided an update on its Winterfell oil development project in the Green Canyon area. The project partners, which include Kosmos Energy, Beacon Offshore, and handful of other developers, approved the field development project in September. In November, a Beacon affiliate signed a rig commitment letter to drill and complete three wells for the project starting mid-2023. According to Kosmos Energy, further agreements should follow during the next few months on the host facility that will handle the production and on the midstream export. The partners are targeting first oil in Q1 2024.

Elsewhere, Anadarko US Offshore LLC (Oxy) and Ridgewood Energy have agreed to participate in the Oso-1EXP exploration well in Atwater Valley block 138. Murphy Oil will remain the operator with 33.34%, the company said in its latest results statement. Drilling activities are expected to get underway sometime soon.

On the lease sale front, the Bureau of Ocean Energy Management (BOEM) has published a Proposed Notice of Sale for Gulf of Mexico OCS Oil & Gas Lease Sale 259. A Proposed Notice of Sale issued in October gave stakeholders the opportunity to submit comments and recommendations to BOEM regarding the size, timing and location of the lease sale, until Nov. 21, 2022. The Inflation Reduction Act directed BOEM to hold Lease Sale 259 by March 31, 2023. BOEM is expected to provide additional information regarding Lease Sale 259 in the near future.