Deepwater Gulf of Mexico yields huge find

BP Amoco plc and partners have made an ultradeepwater strike that they believe could be one of the Gulf of Mexico's biggest discoveries.

The oil and gas find was drilled on Green Canyon Block 826 in 6,734 ft of water and encountered 300 ft of net hydrocarbons-primarily crude oil, say the firms.

GC 826-1 was drilled on the Mad Dog prospect to a total depth of 22,400 ft. The well is on a 21/2-block unit owned by operator BP Amoco 63.56%, Unocal Corp.'s Spirit Energy 76 unit 25%, and BHP Petroleum (Americas) Inc. 11.44%.

The unit is in the southeastern portion of the Green Canyon area, due south of New Orleans (see map, OGJ, Feb. 22, 1999, p. 29), and comprises Blocks GC 825, 826, and the southern half of 782.

BHP says Mad Dog is believed to extend into 4½ adjacent blocks. These blocks-GC 738, 739, 781, the northern half of 782, and 783-are owned 56% by BP Amoco and 44% by BHP.

Spirit Energy 76 estimates that, within the 2½ block unit on which the discovery well was drilled, Mad Dog's gross resource potential is greater than 400 million boe and could be as much as 800 million boe.

"If the upper range of this initial resource estimate is confirmed," said the company, "Mad Dog could be one of the largest discoveries yet announced in the Gulf of Mexico."

Spirit Energy 76 Pres. John T. Donohue said, "While further appraisal drilling will be needed to determine the full extent and size of this find, we can say that Mad Dog is, without question, a very significant discovery. We are considering an appraisal program with our partners that anticipates additional drilling later this year or early next year."

A new trend?

Mad Dog lies along a trend that BHP refers to as the Atwater Foldbelt and Unocal calls the Eastern Foldbelt and Salt Canopy. Regardless of the name, the partners like the way this play is taking shape.

BHP Petroleum Pres. Philip Aiken said the results of its exploratory drilling in the Atwater Foldbelt, together with its exploration success on the Typhoon prospect in Green Canyon, provided initial encouragement for his firm's focused exploration strategy, and, in particular, its decision to pursue opportunities in the deepwater Gulf of Mexico. Previous finds it considers part of this trend are Atlantis on GC 699 and the Neptune feature on Atwater Valley Block 575.

BHP owns a 100% working interest in 21 additional blocks in the Walker Ridge area of the gulf, into which it says the Atwater Foldbelt extends for about 60 miles.

"In total, BHP has interests in 128 blocks along the entirety of the Atwater Foldbelt trend, making it an important component of BHP's deepwater Gulf of Mexico exploration strategy," said the company.

David A. Johnson, Spirit Energy 76's vice-president for exploration, said Mad Dog likely represents a "trend opening" discovery for the Eastern Foldbelt and Salt Canopy play. Unocal's deepwater holdings include several other prospects and leads in this trend that have geological characteristics similar to Mad Dog.

"The discovery demonstrates the potential value of Unocal's deepwater blocks on this trendellipse," said Johnson. "It has substantially decreased some of the risk parameters associated with this trend and increases the value of the prospects and leads we have already identified in our acreage."

Spirit Energy 76 has reached an agreement with Conoco Inc. to acquire a 50% working interest in the lease covering GC Block 562. This block holds the K2 prospect, which is just north of Mad Dog and on the same geologic trend.

"K2 is a very interesting prospect," said Johnson, "with attractive resource potentialellipseWe are excited to have a substantial interest in the project."