By OGJ editors
HOUSTON, Mar. 3 – Energy Partners Ltd., New Orleans, and Phoenix Exploration Co. LP, Houston, will explore moderate depths below production at the giant East Bay area on South Pass blocks 24, 26, and 27 off Louisiana.
The East Bay area is nearly all in state waters where the state offers severance tax suspension on wells at 15,000 ft or more of true vertical depth. East Bay, in shallow water 90 miles southeast of New Orleans, is the sixth largest field on the Gulf of Mexico shelf in terms of cumulative production.
Technical teams from both firms will use EPL’s 223 sq miles of newly reprocessed seismic data to generate Miocene prospects at 14,000-20,000 ft that can be drilled for $12-20 million.
The companies don’t plan to pursue perceived potential in Lower Miocene, Oligocene, and Eocene at costlier ultradeep depths. First drilling could occur in late 2011.
The agreement provides for EPL to farm out acreage at East Bay, with a promoted overriding royalty interest in favor of EPL on interest Phoenix earns in successful prospect areas. EPL retained the right to participate up to a 50% working interest in each prospect area.
EPL said it chose Phoenix over others because of its “expertise and excellent track record exploring similar plays in this region. By leveraging our respective skill-sets, the agreement allows us to more efficiently generate and drill high-impact prospects below our existing shallow productive horizons.”
The moderate depths offer “high-potential resources on the Gulf of Mexico shelf for shallow water costs” at compelling risk-reward, EPL said.
Dreamstime | © Charles Montgomery.
Photo from SABIC Limburg BV.
