MMS okays suspensions for ultradeep wells

By OGJ editors
HOUSTON, Dec. 16 -- The US Minerals Management Service has issued a final rule that will allow suspensions of operation (SOOs) to oil and gas operators contemplating ultradeep wells (deeper than 25,000 ft TVD) in the Gulf of Mexico.

A SOO temporarily suspends time counted toward lease expiration for companies needing more time for data analysis prior to drilling.

MMS officials said the availability SOOs might increase US production by accommodating the complexity and cost of drilling ultradeep wells.

MMS's final rule grants SOOs under the following circumstances:

-- The lease has either a 5-year or 8-year primary term with a requirement to drill within the first 5 years.

-- The lessee or operator has approved plans to drill an ultradeep well on the lease.

-- Before the end of the fifth year of the primary term, the lessee or operator must have acquired and interpreted geophysical data that indicate that all or a portion of a potential hydrocarbon-bearing formation is ultradeep and that include full 3D depth migration over the entire lease area.

-- Before requesting the suspension, the lessee or operator has conducted, or is conducting, additional data processing or interpretation of the geophysical information with the objective of identifying a potential ultradeep hydrocarbon-bearing geologic structure or stratigraphic trap.

-- The lessee or operator demonstrates that additional time is necessary to complete current processing or interpretation of existing geophysical data or information; to acquire, process, or interpret new geologic or geophysical data or information that would impact the decision to drill the same geologic structure or stratigraphic trap; or to drill into the potential hydrocarbon-bearing formation identified as a result of the activities conducted in previous paragraphs.

Deepwater leases with 10-year primary terms are not covered by the final rule because MMS believes that 10 years is sufficient to explore and develop deep prospects.

The final rule becomes effective Jan. 17, 2006.

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