The next deep thing

Just as operators have become comfortable with pursuing deep gas, the US Minerals Management Service has started thinking about the next frontier - ultra-deep gas.

Just as operators have become comfortable with pursuing deep gas, the US Minerals Management Service has started thinking about the next frontier - ultra-deep gas.

During The Energy Forum in Houston on March 4, Chris Oynes, the Gulf of Mexico regional director for the MMS, told explorationists that companies have begun approaching him about potential royalty relief schedules and lease changes aimed at producing gas from 25,000-40,000 ft on the outer continental shelf. Just in the last few years, operators have begun producing gas from below 15,000 ft under a structure of special royalty relief incentives.

Oynes said companies interested in the ultra-deep gas have spurred thought about revising lease terms, but he cautioned that any changes would not occur until after meetings with representatives have been held. He said the MMS is moving toward setting up forums to discuss the topic.

"We may have inadequate lease terms ... for going after this kind of potential, this kind of target," he said.

03/04/03

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