McMoRan Exploration updates GoM activities

The Ammazzo deep gas exploratory prospect on South Marsh Island block 251 has been drilled to measured depth of 25,488 ft (7,769 m), according to McMoRan Exploration.

Offshore staff

NEW ORLEANS -- The Ammazzo deep gas exploratory prospect on South Marsh Island block 251 has been drilled to measured depth of 25,488 ft (7,769 m), according to McMoRan Exploration. The well encountered a significant sand section with high quality reservoir rock below 24,500 ft (7,468 m), which was determined to be wet. While the well was evaluated to be nonproductive, the important geological information gained from the well continues to support McMoRan's belief that there are large, deep structures with the potential to contain significant hydrocarbon reserves available on the shelf, the company says. The Ammazzo well will be temporarily abandoned as future plans are considered.

In March, the company began drilling on the Cordage deep gas exploratory prospect towards a proposed total depth of 19,500 ft (5,943 m). The Cordage prospect, which is located in West Cameron block 207, is targeting Rob-L and Rob-M (Operc) sands in the Middle Miocene. Upon completion of operations at Cordage, the rig will be moved to the Sherwood prospect on High Island block 133 to begin exploration drilling activities.

Earlier this year, McMoRan re-entered a previously existing wellbore and began sidetracking operations at the Blueberry Hill deep gas prospect on Louisiana State Lease 340. The well is currently drilling below 14,700 ft (4,481 m) with a proposed total depth of 24,000 ft (7,315 m). In February 2005, McMoRan encountered four hydrocarbon bearing sands in the Gyro section below 22,200 ft (6,767 m) in the original Blueberry Hill exploratory well. Completion efforts in 2007 were unsuccessful because of blockage above the perforated intervals. The sidetrack currently in-progress is targeting the same Gyro sands, which McMoRan believes could be better developed in a down dip position on the flank of the structure.

McMoRan is currently conducting a feasibility assessment to determine the practicality of re-entering a previously abandoned wellbore to evaluate the Davy Jones ultra-deep prospect. Davy Jones is a very large ultra-deep structure, northwest of Ammazzo. This exploratory well, which McMoRan will operate, has a proposed total depth of 28,000 ft (8,534 m) and will test Eocene and Paleocene (Wilcox) sections.

In May, the Minerals Management Service granted McMoRan's request for a geophysical Suspension of Operations (SOO) to extend leases in the Blackbeard area, including South Timbalier block 168. The SOO will provide time for seismic re-processing, which will provide a clearer picture of the deep structure, and allow the company to evaluate whether to drill deeper at Blackbeard West, drill an offset location, or complete the well to test the existing zones.

Following the Flatrock discovery in OCS 310 on South Marsh Island block 212 in July 2007, McMoRan has drilled five additional successful wells in the field. Four wells have begun production and gross production from the field averaged approximately 220 MMcfe/d in the first quarter. Production from these wells is currently temporarily shut in for previously reported planned facility expansion, maintenance, and remediation activities.

First production from the Flatrock Nos. 5 and 6 wells is expected by mid-year. In April, a successful production test was performed on the Flatrock No. 6 well. The production test, which was performed in the Rob-L section, indicated a gross flow rate of approximately 22 MMcf/d of natural gas and 485 bbl of condensate on a 16/64th choke with flowing tubing pressure of 10,680 psi. The company believes the well is capable of producing at a gross rate of 50 - 60 MMcfe/d. Following these activities, McMoRan expects the gross production rate from the six wells in the field to approximate 335 MMcfe/d.

McMoRan is also evaluating a sidetrack of the Hurricane Deep well on the southern flank of the Flatrock structure to test the Gyro sand encountered in the well on South Marsh Island block 217. The Hurricane Deep exploratory well was drilled to a true vertical depth of 20,712 ft (6,313 m) in 1Q 2007 and logs indicated a thick upper Gyro sand totaling 900 gross ft (274 m), the top 40 ft (12 m) of which was hydrocarbon bearing. McMoRan believes an up dip well has the potential to contain a thicker hydrocarbon column.

"Our Flatrock discovery confirmed the presence of sands with high permeability and porosity below 15,000 ft (4 572 m) and the results from the Ammazzo well indicate sands with high porosity, similar to the porosity present in large deepwater discoveries, also exist at 24,500 ft (7,468 m)," says James R. Moffett, co-chairman of McMoRan. "The data from these wells, together with information from the Blackbeard West well and McMoRan's extensive 3D database, are allowing us to correlate the depositional trends from the onshore and the deepwater, which will enable us to continue to pursue a major new exploration frontier on the Shelf of the GoM."

05/28/2009

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