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Jennifer E. Smith

MMS planning eastern Gulf sale

The US Minerals Management Service (MMS) said it is beginning a three-year planning process for a federal lease sale in the Eastern Gulf of Mexico Planning Area. The sale area is 15 miles off Alabama and 100 or more miles off Florida, containing 1,033 blocks covering 5.949 million acres. It is the only area in the Eastern Gulf Planning Area available for lease, since the rest of the Eastern Gulf is subject to the offshore leasing moratorium announced by US President Clinton last year and so will not be available until 2012.

In determining the area to be offered in Sale 181, the government consulted the states of Alabama and Florida. Florida is hesitant about allowing drilling near its tourist-laden beaches. Through one method or another, it has delayed Chevron's Destin Dome project for years. Florida has requested no new leasing within 100 miles of its coastline, and its neighbor Alabama has requested no platforms within 15 miles of its coastline (no platforms within view).

However, Alabama recently allowed Unocal Spirit Energy 76 to begin production using a small deck platform in Pensacola 881, only nine miles off Gulf Shores, Alabama. Production of 5 MMcf/d is tied back using an 8-in. line to Mobile Bay 916. The exemption was made because the lease agreement predated certain administrative conditions. According to the MMS, this is the first lease production ever from the eastern Gulf of Mexico area.

Sale 181 is tentatively scheduled for December 2001, though the agency said it may move the date to March 2002, allowing the Eastern Gulf sale to be combined with central Gulf of Mexico Sale 182.

In anticipation of Sale 181, TGS-NOPEC has begun three new non-exclusive 3D seismic surveys in the Viosca Knoll, Destin Dome, and DeSoto Canyon areas in the Gulf of Mexico. In October, TGS in cooperation with Eagle Geophysical began a 105-block 3D survey in Viosca Knoll and Destin Dome areas. Half the area is in the Eastern Gulf Planning Area. Also, TGS began two surveys in partnership with CGG covering 129 blocks in the DeSoto Canyon area.

New drillship begins work

The Deepwater Pathfinder, a new-generation ultra-deepwater drillship, began a five-year work program drilling for Conoco on February 1. It spudded its first well at Garden Banks 783 in 4,690 ft of water. The dynamically positioned drillship is expected to drill three or four wells in its first year of operation. The Pathfinder is capable of drilling in up to 10,000 ft of water, has triple-redundant power and operating functions, and has computerized rig floor operations, virtually eliminating the human element from direct operation of drilling equipment. This last attribute, according to Conoco, reduces the risk of injury and in creases efficiency. A second, similar drillship is expected to be delivered for another Conoco contract early this year, about two months ahead of schedule.

Leviathan acquires gathering system interest

Leviathan Gas Pipeline agreed to buy a 49% interest in Viosca Knoll Gathering Co. from El Paso Field Services. The purchase is worth $85.26 million. Viosca Knoll Gathering owns 100% of the Viosca Knoll Gathering System - a 125-mile, 1 Bcf/d gathering system built in 1994 to serve the Main Pass, Mississippi Canyon, and Viosca Knoll areas of the Gulf of Mexico off Louisiana. Cash payment will be $21.315 million, and the remainder will be Leviathan common stock. Though the transaction is subject to shareholder approvals, it is expected to close March 31. Immediately before closing, El Paso will contribute $33.35 million in cash to Viosca Knoll Gathering. After doing so, El Paso's interest in Leviathan will increase to 34% from the current 27.3%.

E&P Briefs

  • East Cameron 152 No. 1 well was drilled to a TD of 9,990 ft and found 43 ft of productive sands between 9,600 ft and 9,700 ft. The interval tested at 9.9 MMcf/d of gas and 910 b/d of condensate through a 17/16-in. choke with a flowing tubing pressure of 6,000 psi. Seagull Energy operates the find with 50%, and Spinnaker Exploration holds the remainder. The well should be put on production within six months.
  • The Genesis Project began producing 30,000 b/d of oil and more than 20 MMcf/d of gas on February 1. Genesis is located in 2,600 ft of water on Green Canyon 205, 160, and 161. The $750 million Genesis Project will continue to produce at this plateau throughout 1999. By 2000, Genesis will reach a peak capacity of 55,000 b/d of oil and 72 MMcf/d of gas. Genesis's production platform is a floating spar which accommodates both drilling and production facilities. Operator Chevron holds 56.67%; Exxon, 38.38%; and PetroFina Delaware, 4.95%.
  • Matagorda Island 622 C-2 S/T, which was recently completed from a platform on the block, tested 68 MMcf/d of gas and 466 b/d of condensate with a flowing tubing pressure of 2,007 psi. The well increases field production capacity to 370 MMcf/d. BP Amoco operates the Matagorda Island 623 natural gas field offshore Texas with 44% interest; Anadarko holds 37%; and Enron Oil & Gas has 19%.
  • High Island Block A-494 well No. C-1, located in the Snapper prospect, reached a TVD of 8,800 ft and found 207 ft gross hydrocarbon column with 80 net ft of natural gas pay in the objective sand. Production to sales line is expected by early June. PetroQuest operates the discovery with 42% and Callon owns 50%.

Copyright 1999 Oil & Gas Journal. All Rights Reserved.

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