Gulf of Mexico

Sept. 1, 1996
US Gulf of Mexico gas producers are straining to replace produced reserves. Of all the mobile drilling rigs engaged in exploration and development in the Gulf of Mexico, 94% are drilling for gas, according to Baker Hughes, whose statistics indicate the historic average for gas rigs in the Gulf of Mexico is 65%.

Gulf of Mexico gas drilling up sharply

US Gulf of Mexico gas producers are straining to replace produced reserves. Of all the mobile drilling rigs engaged in exploration and development in the Gulf of Mexico, 94% are drilling for gas, according to Baker Hughes, whose statistics indicate the historic average for gas rigs in the Gulf of Mexico is 65%. Higher average gas prices are driving the offshore increase and a 23% onshore US drilling gain. Increasing gas usage in the USA over the winter months and higher storage capacities are also spurring drilling. Average US Gulf of Mexico wells deplete to below commercial output within six years, and much of the current drilling is an effort to replace produced gas reserves. According to a Natwest Securities study, 1994 gas reserves increased by only 1% even though drilling increased by 10% and in 1995, reserves actually declined by 3% despite a 12% drilling increase. Given these circumstances, the appearance of one or several hurricanes in the US Gulf could significantly diminish production and drive gas prices higher.

Global Marine's dynamically positioned peace dividend

The high-tech drillship used 20 years ago by the US Navy to lift parts of a sunken Russian submarine from deepwater will be converted into a drillship. The giant Glomar Explorer, designed for the US Navy by Global Marine Drilling, will be leased by its designers and converted to a deepwater drilling vessel. The Glomar Explorer was one of the first large dynamically-positioned vessels, using thrusters and taut line to maintain position. Global Marine, which said it has a five-year, $260 million contract for the vessel, negotiated a 30-year lease for the Explorer. Global declined to identify the oil company but the contract is reportedly for drilling in 7,500-ft Gulf of Mexico waters. Global Marine, which has operated the vessel since 1975, will spend $160 million to prepare the drillship for the contract. From 1978 to 1980, the vessel was used in mining tests in water depths up to 17,000 ft. The vessel is 116 ft wide and 619 ft long, slightly shorter than the drillship being built for Sonat Drilling. Global Marine will take delivery of the ship in the third quarter of 1996 and have it ready for contract in the first quarter of 1998.

Ursa largest in Gulf

Shell's 63,000-ton tension-leg platform (TLP), Ursa, will be the largest platform structure in the US Gulf of Mexico. The TLP will be almost twice as large as the recently installed Mars platform and larger than the 41,000-ton Ram/Powell TLP currently under construction. Water depth at the Ursa site, Mississippi Canyon Block 810, is 1,222 meters, compared with a 980-meter water depth at the Ram/Powell site. Construction on the Ursa TLP began last month. Reserves to be produced through Ursa are estimated at 400 million bbl. Production is scheduled to begin in 1999 with peak production through 14 wells estimated at 150,000 b/d and 400 MMcf/d.

GOM vessel rates climbing

Support vessels being committed for new work in the US Gulf of Mexico are now being contracted at rates as high as $5,500/day, according to major Gulf fleet operator, Tidewater. Supply vessel dayrates in the first quarter of this year averaged slightly under $4,300, but had risen to $4,700 by the end of the first quarter, according to Tidewater chairman, William O'Malley. "The current strength of the Gulf of Mexico market continues to push rates for Tidewater's fleet even higher," he said.

Dauphin Island expanding line

Dauphin Island Gathering Partners have agreed to add two gathering-line extensions to its 90-mile gas gathering system offshore Alabama. The extensions will reach south to connect the Enron-operated Viosca Knoll 124 production platform and an OEDC-operated platform at Viosca Knoll 121. PanEnegy has purchased a 40% stake in Dauphin Island Gathering Partners for $36 million. Currently, the 400 MMcf/d capacity line gathers 170 MMcf/d of gas from the Viosca Knoll and Mobile areas.

Marathon hits major producer

Marathon Oil has tapped a major producing well in Ewing Bank 963 in the US Gulf of Mexico. The first well drilled on this block tested at a rate of 8,700 b/d of 25 degree API oil and 6.4 MMcf/d of gas from an interval below 12,000 ft. The well was drilled to 13,100 ft. Flow tubing pressure was 2,510 psi. An appraisal well will be started before year-end.


  • Shell Offshore is producing from three deepwater wells completed this year. The Rocky satellite well, four miles south of the Bullwinkle fixed platform, is producing 6,000 b/d. Production from Popeye's two wells is flowing to the Cougar Platform in South Timbalier. The Pijar-1 well is flowing 470 b/d from one zone and 3.5 MMcf/d and condensate from a second.
  • Conoco has tested its Ewing Bank Block 306/A-14 well in the US Gulf of Mexico at 5,230 b/d and 5 MMcf/d. Conoco's partner is Elf Exploration (20%).
  • A Seagull Energy Vermilion Block 75 gas discovery will be brought onstream by the end of this year. The well tested 3 MMcf/d from a 36-ft interval and 3.1 MMcf/d from a 20-ft interval.
  • Enserch Exploration has suspended drilling on a Garden Banks subsalt well which sustained multiple wellbore collapses. The drilling target was a 600-ft thick hydrocarbon interval under a salt dome. An alternative approach is being developed.
  • Convest Energy reported a non-commercial well in South Timbalier Block 109 of the US Gulf of Mexico. The well was drilled to 5,700 ft.
  • Marathon has acquired a 28% interest in Poseidon Oil Pipeline Company, which will build and operate the Poseidon pipeline in the US Gulf. Texaco and Poseidon Pipeline each own a 36% interest.
  • Forcenergy has acquired net interests in 11 producing fields in the US Gulf of Mexico from Amerada Hess for $11.2 million. Reserves are 496,000 bbl oil and 15 bcf gas.
  • Sonat Exploration has begun production on two High Island Block 39 wells. The B1 well is producing at 24 MMcf/d and 270 bbl condensate, and the B2 well is producing 61 MMcf/d and 450 bbl condensate. The formation is Miocene age at 11,500 ft.
  • Jebco Seismic and Petroleum Geo-Services will conduct a 1,500 block 3D seismic acquisition program in the Garden Banks, Green Canyon, Walker Ridge, Mississippi Canyon, Atwater Valley, Keathley Canyon, and Lund areas of the US Gulf.
  • United Meridian (UM) has struck natural gas in three exploratory wells in the US Gulf of Mexico and ordered platforms for two of them. The three strikes are in High Island 98-L, High Island A-329, and West Cameron 541.
  • Noble Drilling's mat jackup Linn Richardson has been declared a total loss after damage sustained when it lost two leg sections while under tow from the Gulf of Mexico to Senegal late in 1995. The rig is presently in Sabine Pass, Texas.
  • Heavy-duty jackup Rowan Gorilla IV is nearing the end of a contract with Hunt Oil to drill the St. Georges Bay A-36 well off eastern Canada. The rig is expected to demobilize to the US Gulf of Mexico for short-term work.

  • Partners Leviathan Gas Pipeline Partners and MidCon Corporation have started production from Garden Banks 117 in the US Gulf of Mexico. Initial production from the first well was 4,700 b/d oil and 7.8 MMcf/d gas.
  • Oceandril's Ranger jackup has been contracted to conduct workover and completion operations for Seagull in Vermilion 75 and to Aviva's Main Pass 40 platform for a two-well workover.

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