McMoRan group may be near testing Davy Jones

McMoRan Exploration Co., New Orleans, said it has cleaned out the Davy Jones-1 wellbore on the Gulf of Mexico shelf offshore Louisiana to 28,630 ft, which will enable testing of all 165 ft of Wilcox sand perforations.

McMoRan has replaced heavy mud with clear completion fluid, the last step needed before running production tubing, replacing the blowout preventer with the production tree, and conducting flow tests.

Operations to clear the wellbore of the heavy drilling mud used to suppress flow in the well required more time than expected following Hurricane Isaac because residual barite material hardened at the perforations in the bottom of the wellbore while operations were interrupted, the company said.

During initial attempts to perforate and flow test the Wilcox F sand in March 2012 when the hydraulic perforating equipment malfunctioned, these steps took 2 weeks. Once these steps are complete, McMoRan expects to commence flow testing, and commercial production is expected shortly thereafter, the company said.

Davy Jones-1 represents the first shallow water, ultradeep subsalt completion attempt on the shelf.

Meanwhile, completion and testing of the Davy Jones-2 offset appraisal well is expected to begin following review of results from Davy Jones-1. Davy Jones is on a 20,000-acre structure that has multiple additional drilling opportunities.

McMoRan, operator with a 63.4% working interest and 50.2% net revenue interest, said its investment in Davy Jones at Sept. 30, 2012, totaled $961 million, which includes $474.8 million in allocated property acquisition costs.

McMoRan has submitted initial development plans for the Blackbeard East prospect. McMoRan is seeking approval to test and complete the Upper Miocene sands in 2013 using conventional equipment and technologies. Additional plans for development of the deeper zones are being evaluated. Blackbeard East went to 33,318 ft in January 2012 on South Timbalier Block 144.

McMoRan also submitted initial development plans for the Lafitte prospect on Eugene Island Block 223. The company seeks approval to complete and test Jackson/Yegua sands below 33,300 ft in the Upper Eocene. This completion will require the development of 30,000 psi equipment. TD is 34,162 ft.

The Blackbeard West-2 ultradeep exploratory well on Ship Shoal Block 188 is drilling below 23,600 ft towards a proposed 24,500 ft to evaluate deeper Miocene targets.

Recent log data indicate the presence of potential low-resistivity pay zones, one of which is 80 ft thick and requires further evaluation. In addition, wireline logs show Middle Miocene sands below 22,500 ft with 24% porosity that have potential hydrocarbon columns on water.

The presence of sands with high porosity is significant, McMoRan said, indicating that sands can retain excellent characteristics in a high-temperature, high-pressure environment on the shelf below the salt weld. McMoRan holds a 69.4% working interest and a 53.1% net revenue interest in Ship Shoal Block 188, where its investment in Blackbeard West-2 totaled $71.5 million at Sept. 30.

The information obtained from Blackbeard West-2 provides positive data to support McMoRan’s “cupola” play, which targets Miocene objectives immediately below the salt weld.

These objectives are typically above 25,000 ft, where lower pressure and temperatures may enable the use of more conventional equipment and technologies, and potentially increase the amount of liquid hydrocarbons accompanying the natural gas. McMoRan’s drilling results from Blackbeard West No. 2 enhance the prospectivity of other “cupola” prospects on McMoRan’s leasehold position, including the Barbosa and Calico Jack prospects.

The Chevron USA Inc.-operated Lineham Creek exploratory prospect onshore in Cameron Parish, La., 55 miles northwest of Davy Jones, is drilling below the salt weld at 23,100 ft. The well, which is targeting Eocene and Paleocene objectives below the salt weld, has a proposed total depth of 29,000 ft. McMoRan is participating for a 36% working interest.

McMoRan on Sept. 19 spudded the Lomond North ultradeep prospect. Lomond North, in the Highlander area in St. Martin Parish, La., is drilling below 6,700 ft and is projected to 30,000 ft. It targets Eocene, Paleocene, and Cretaceous objectives below the salt weld.

McMoRan has identified multiple exploratory prospects in the Highlander area where it controls rights to 80,000 gross acres in Iberia, St. Martin, Assumption, and Iberville parishes. Lomond North is 65 miles north of Davy Jones. McMoRan is operator with 72% working interest. Energy XXI (Bermuda) Ltd. has 18% and W.A. “Tex” Moncrief Jr. has 10%.

McMoRan believes that the deepwater, shelf, and the onshore are all one geologic basin.

Onshore ultradeep prospects like Lineham Creek and Lomond North have structural similarities both in shape and size to major subsalt structures in the deepwater gulf. Lineham Creek and the Highlander area are 95 miles apart.

McMoRan has been awarded all 14 leases from June 2012 Central Gulf of Mexico lease sale. As previously reported, six of the 14 bids were sole bids by McMoRan and the remaining eight were made jointly with Chevron USA. These blocks enhance McMoRan’s shallow water, ultradeep exploration acreage in and around the Davy Jones West, England, Calico Jack, Barataria, Captain Blood, and Lafitte prospects.

Including the newly awarded leases, McMoRan’s leasehold inventory approximates 920,000 gross acres, including 385,000 gross acres associated with the ultradeep trend.

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