HOUSTON – Murphy Oil is bulking up its US Gulf of Mexico portfolio with larger stakes in existing fields and making deals for both operated and non-operated wells to be drilled this year and in 2023, according to a recent S&P Global report.
The company’s King’s Quay FPS came online in April and will initially be a seven-well program. It is currently flowing 70,000 b/d of equivalent oil, 87% crude oil, with 18,000 b/d of oil equivalent net to Murphy, company CEO Roger Jenkins was quoted as saying in the S&P Global report.
“Our Gulf of Mexico assets continue to be a home run” for the company's production profile and asset portfolio, Jenkins said in webcast remarks during a second-quarter earnings conference call.
King’s Quay, which produces from the Samurai, Khaleesi and Mormont fields, has a nameplate capacity of 100,000 boe/d. At the end of Q2, four wells were flowing into King's Quay.
“Toward year-end we expect to approach 85,000 boe/d of nameplate capacity” from the facility, said Eric Hambly, executive vice president for operations, as quoted in the S&P Global report. “If we continue to see outperformance of our wells, we think we can very easily get to 100,000 boe/d capacity from the facility with minor adjustments, so we're excited about the remaining wells as we come to the end of the year.”
Completions are now progressing on the fifth well, Jenkins said, with two well completions remaining. That is the last Khaleesi/Mormont well, after which the drilling rig will move to the Samurai field for the final two wells.
Recently, Murphy took steps to expand its holdings in the US Gulf where it has around 650,000 total gross acres across 69 exploration blocks.
The company estimates that its acreage holds 1 billion barrels of oil equivalent resource potential over which it has identified more than 20 key prospects, Jenkins said.
In Q2, the company acquired an additional 11% working interest in the non-operated Kodiak field for $47 million, bringing its stake in that field to 59.3%.
Murphy also recently signed an agreement to acquire an additional 3.4% working interest in the Lucius field, operated by Occidental Petroleum, for $77 million. That deal is expected to close in Q3. This deal will bring its share of the field to 16.1% within two years.
Murphy has no plans to drill any wildcats in the Gulf this year, but it is targeting a two-well exploration program in the region for 2023.
The Oso #1 well, in the deepwater Atwater Valley area, will be drilled with partner Ridgewood Energy. Murphy holds 50% and will operate the well, which targets a gross resource potential of 130 million-275 million boe.
Meanwhile in Q3, the company will drill the Dalmatian #1 development well at DeSoto Canyon block 90 offshore Louisiana, which is projected to be online in 2023.
Also in Q3, Murphy is participating in two non-operated drills for subsea tiebacks. One involves the Lucius #10 and Lucius #4 wells at Keathley Canyon 918-919 operated by Occidental Petroleum. The wells should be online in Q4.
The other non-operated subsea tieback is at the Kosmos Energy-operated Kodiak #3 well at Mississippi Canyon 727, which should be online in Q3.
“Both Kodiak and Lucius have rig programs ongoing today, leading to total incremental estimated production of 1,500 boe/d annualized for 2022, with total incremental production of 4,100 boe/d forecast for 2023,” Jenkins was quoted as saying.
Murphy has also divested its 50% of working interest in the operated Thunder Hawk field, in the prolific Mississippi Canyon area that is near BP’s Thunder Horse field. The field, which Murphy discovered in 2004 and is sited in 5,700 feet of water, currently produces 800 boe/d net to Murphy. Murphy not only received $16 million for its Thunder Hawk stake less adjustments, but its liabilities were reduced by $37 million, the company said in a statement.