DEVELOPMENT PROJECTS MUSHROOM IN GULF

Gulf of Mexico area operators are setting a brisk pace in exploration and development.

In the most expensive operation, Exxon Co. U.S.A. has decided to proceed with two significant ultradeep water gas development projects.

Its plans involve:

Mississippi Canyon Block 354, to be developed with a multiwell subsea system set in 1,500 ft of water. The project, known as Zinc, has been on the shelf since 1986 due to low prices and poor markets (OGJ, May 30, 1988, p. 32).
Mississippi Canyon Block 397, to be developed with a conventional platform set in 468 ft of water. The project, designated Alabaster, also has been on the shelf since 1986 (OGJ, Sept. 1, 1986, p. 34).
Operators are moving cautiously in the frontier ultra deepwater gulf because of high risks and costs. Placid Oil Co. and its partners earlier this month ceased operations at a $400 million ultra deepwater project (OGJ, Apr. 23, p. 30).

Among other action in the gulf region:

Santa Fe Minerals Inc. and Oryx Energy Co. plan to develop a major gas discovery on Garden Banks Block 224 with a subsea completion connected to a platform to be installed on High Island Block A-384. Oryx said the 14.6 mile flow line from the $18.5 million subsea completion to the High Island A-384 platform will be the longest in the gulf and second longest in the world.
Union Exploration Partners Ltd. (UXP), in which Unocal Corp.'s Union Oil Co. of California is managing general partner, is considering delineation and development of four gas/condensate discoveries in the gulf and Louisiana.
Transco Exploration & Production Co. (Tepco) and partners plan to install two platforms, one in the Brazos area off Texas and one in the East Cameron area off Louisiana, both scheduled to begin gas production in the third quarter.
A combine led by Louisiana Land & Exploration Co. plans confirmation drilling of two discoveries off Texas.
A Seagull Energy Corp. group is laying plans for further drilling near its dual gas discovery, also off Texas.

EXXON PROJECTS

Exxon estimates its two ultradeepwater projects will cost about $500 million. Plans are to drill 22 wells to 7,000 15,000 ft.

Production from the Mississippi Canyon 354 subsea system will move by pipeline to the Mississippi Canyon 397 platform.

Production from the projects, each with an expected life of 20 years, is to begin early in 1992.

Peak rates are expected to be 115 MMcfd of natural gas and 2,500 b/d of crude and condensate.

Southern Natural Gas Co. will lay a gas pipeline to the Mississippi Canyon 397 platform and purchase or transport production.

Marshall Dickson, Exxon's offshore division manager, said the Zinc project will be Exxon's first application in the Gulf of Mexico of deepwater subsea technology first proved by the company's submerged production system.

Dickson said the Zinc system, designed for diverless operation, will be the largest multiwell subsea satellite application by industry in the Gulf of Mexico.

Zinc will be Exxon's deepest water development in the gulf.

The current record holder for Exxon is the Lena guyed tower in 1,000 ft of water on Mississippi Canyon Block 280.

SANTA FE-ORYX PLANS

Santa Fe-Oryx's Garden Banks Block 224 subsea completion is to start production at 20 MMcfd early in 1991. The completion, in 745 ft of water, enables the combine to forego construction of a deepwater platform that could cost more than $100 million.

The block initially will be produced from the single completion.

Oryx has a 50% working interest in Garden Banks Block 224. Santa Fe, the operator, holds the remaining interest.

The two companies acquired the block for $7.3 million at the 1983 western gulf area-wide lease sale. The discovery drilled on the block was the first announced in the western gulf in water deeper than 600 ft (OGJ, Oct. 29, 1984, Newsletter).

Meanwhile, Oryx plans a major development project on High Island A-384, in which it holds a 100% interest. The $33 million, six slot platform will be set in 360 ft of water.

Four discovery wells have been drilled on the block.

UNION DISCOVERIES

UXP's discoveries are:

The E-13 OCS-G-7301 well on Ship Shoal Block 253, which found significant gas reserves in a new fault block about 1 mile from a platform UXP operates.
The well cut 123 ft of Pliocene sands below 11,100 ft, which will be tested after completion of a followup well. The discovery is in 170 ft of water on a block that UXP shares equally with Marathon Oil Co.
The 1 OCS-G-7757 well on Ship Shoal Block 268, which also found gas reserves in a new fault block. The well cut 143 ft of net natural gas pay in eight Pleistocene sands at 2,500 ft and 4,200 ft.
UXP, which holds a 100% interest in the block, expects to test the well after setting a subsea template and drilling a step-out. The discovery is in 190 ft of water adjacent to production facilities UXP operates on Ship Shoal Block 269.
The C-2 OCS-G-0787 new pool discovery in South Marsh Island Block 48 field, which found significant reserves when deepened an additional 1,500 ft to 15,800 ft.
The well, in 96 ft of water, flowed 8.2 MMcfd of gas and 144 b/d of 48 gravity condensate through a 24/64 in. choke with 2,141 psi flowing tubing pressure from Pliocene perforations at 15,610-640 ft.
The partnership holds a 100% interest in the block.
The F-18 Louisiana Furs step-out found deep gas reserves in a new fault block in North Freshwater Bayou field, Vermilion Parish, La.
The well cut four Lower Miocene sands at 16,200-18,850 ft with more than 140 ft of net gas pay. Another deep well is planned for the field later this year.

UXP holds an 100% interest in the lease, where four wells produce 50 MMcfd of gas.

TEPCO PLATFORMS

Tepco's platform off Texas will tap a reservoir that flowed 6.9 MMcfd of gas through a 20/64 in. choke with 2,572 psi flowing tubing pressure from Miocene Rob-L sand perforations at 6,958-7,000 ft in a well drilled on Brazos Block 491.

Tepco owns a 38% interest in the block, where its partners are Samedan Oil Corp. and New England Energy Inc. 23% each and Zilkha Energy Co. 16%.

On East Cameron Block 109 off Louisiana, Tepco tested four wells that flowed a combined 25.8 MMcfd of gas and 885 b/d of condensate through 15/64 and 16/64 in. chokes from upper Miocene sands ranging from 7,930 to 11,135 ft.

Tepco holds a 76% interest in the block, and Zilkha owns the remainder.

LL&E STRIKES

LL&E and partners plan further drilling later this year to evaluate a discovery they drilled from a platform installed but never used by a former lessee on Galveston Area Block 313. Bottomhole location lies under Galveston Area Block 331, a south offset to Block 313.

Drilled to 12,520 ft measured depth, the 1 Galveston Area Block 331 discovery flowed 11.1 MMcfd of gas and 263 b/d of condensate with no water through an 18/64 in. choke with 6,681 psi flowing tubing pressure from Rob mayeri pay at 10,400-456 ft, also measured depth.

The combine plans immediate spudding of a confirmation to its second strike, this one on High Island South Addition Block A523. Well No. 1, drilled to 11,652 ft, cut 83 ft of net oil and gas pay in three Pleistocene sands at 10,900 11,400 ft.

LL&E holds a 50% interest in both strikes. Its partners are Northern Michigan Exploration Co. 25% and Equitable Resources Energy Co. and Nerco Oil & Gas Inc. 12.5% each.

The combine, which has a joint venture exploration program under way on 20 federal tracts in the Gulf of Mexico, acquired Galveston Area Blocks 313 and 331 and High Island South Addition Block A523 at OCS Sale 122 Aug. 23, 1989.

SEAGULL TEST

Seagull's 1 OCS G8131, which was drilled in 90 ft of water on Galveston Area Block 383, cut 64 ft of pay in two zones.

It flowed 6.4 MMcfd of gas through a 11/64 in. choke with 1,745 psi flowing tubing pressure from perforations at 6,598 6,627 and 6.5 MMcfd through the same size choke with 1,960 psi flowing tubing pressure from pay at 6,854-77 ft.

Seagull holds a 50% interest in the block. Partners are Ashland Exploration Inc. and Columbus Mills Inc., each with 25%.