Basin Exploration Inc., Denver, is hiking its capital budget by 18% to expand its operations in the Gulf of Mexico, where it has recently deepened one well and participated in drilling five others.
Company officials said Basin is raising its budget to $100 million because of increased cash flows and economic returns from higher oil and gas prices. The company reported a 316% increase in earnings to $12.7 million for the first 6 months of 2000, versus $3 million for the first half of 1999.
Basin Exploration has deepened its No. D-6 exploratory well on West Delta Block 58, originally drilled June 6. At that time, it logged more than 300 net ft of gas and condensate pay in multiple Miocene-aged sands at an intermediate TVD of 11,500 ft.
After deepening the well, Basin encountered more than 100 net ft of additional pay in multiple Miocene sand objectives. It plans to complete the well in the deepest pay section and expects to drill another well later this year to develop the upper pay sands.
Basin operates the well and holds a 75% working interest down to a subsea TVD of 11,300 ft and a 37.5% working interest below that depth. Other working interest owners include Duke Energy Hydrocarbons LLC, Noble Affiliates Inc.'s indirect subsidiary Energy Development Corp., and Entech Enterprises Inc.
Basin also holds a 25% working interest in West Delta Blocks 121/122, where operator Vastar Resources Inc. logged 113 net ft of oil and gas pay in multiple Pliocene-aged sands in a well drilled to 10,800 ft. That well was completed and placed on line in early July. Vastar has 51% interest in those blocks, and Santa Fe Snyder Corp. owns 24%.
Basin also drilled the OCS-G 2876 No. A-5 development well on Vermilion Block 329, where it logged more than 95 net ft of gas/condensate pay in multiple Pleistocene-aged sands after drilling to 6,334 ft. Basin dual-completed the well in two zones and started producing through existing facilities June 29.
Production was stabilized at a gross rate of 9 million cu ft equivalent/day (MMcfed). Basin operates the block with a 52% working interest, but funded 100% of the well's costs. Basin will hold the entire working interest until project costs are recovered.
The company said it also discovered more than 75 net ft of gas/condensate pay in Pliocene-aged sands after drilling the OCS-G 17913 No. A-3 development well on Vermilion Block 267 to 11,500 ft. Production was expected to begin within 30 days through existing facilities on the block. Basin operates Vermilion Block 267 with a 40% working interest. Chieftain International Inc. holds the remaining 60%.
On West Cameron Block 172, the OCS-G No. D-4 exploratory well was drilled to 6,148 ft, where it found 15 net ft of gas pay in Miocene-aged sand. Operator IP Petroleum completed and started producing the well earlier this month, stabilizing production of more than 5 MMcfed. Basin holds a 15% working interest in the block.
Earlier this month, Basin announced it had logged 74 net ft of gas/condensate pay in Miocene-aged sands when it drilled the OCS-G 15231 No. 1 exploratory well at South Marsh Island Block 235 to 10,670 ft (OGJ Online, Aug. 14, 2000). Basin plans to install a production platform and facilities to develop the block along with the adjacent South Marsh Island Block 234.
