HOUSTON -- Helix Energy Solutions Group Inc. has completed drilling an exploration well and two appraisals on its 100%-owned Noonan prospect, confirming commercial pay.
Noonan is on Garden Banks block 506 in 823 m (2,700 ft) of water, about 233 km (145 mi) from Galveston, Texas.
According to Helix, "sufficient pay was encountered to point to reserve potential of at least 100 bcfe."
Development plans being considered include a fast-track subsea tieback to existing infrastructure in shallower water. First production is expected in the second half of 2008.
"We are obviously very pleased to have made a commercial discovery with the first prospect drilled from the deepwater inventory acquired as part of the Remington Oil and Gas transaction last year," says Martin Ferron, Helix president and CEO.
"This demonstrates the considerable potential value of our deepwater resources, especially since we have over 20 high-quality prospects left to drill and the highly skilled personnel necessary to identify and secure more prospects in the future."
"The drilling of the deepwater prospect inventory, particularly with the Q4000, should create significant production returns and provide incremental contracting backlog to supplement an already buoyant medium-term deepwater service outlook," says Ferron.
"All of the development work for Noonan will be performed using Helix assets and services, and we estimate that this work will generate around $100 million of revenue at market rates."
"We may sell up to 50% of our interest to cover development costs and provide cash for possible debt reduction and/or stock repurchase," adds Ferron.