WoodMac: GOM 'top deepwater hunting grounds' in 2006

Exploration in the deepwater Gulf of Mexico marked an exceptionally successful year during 2006, consultancy Wood Mackenzie Ltd. said in a recent report entitled "Treasures of the Deep: A Review of 2006 Exploration."

Feb 1st, 2007

By OGJ editors
HOUSTON, Feb. 1 -- Exploration in the deepwater Gulf of Mexico marked an exceptionally successful year during 2006, consultancy Wood Mackenzie Ltd. said in a recent report entitled "Treasures of the Deep: A Review of 2006 Exploration."

Zoe Sutherland, WoodMac gulf analyst, called the gulf "one of the top deepwater hunting grounds in the world." She told OGJ in a telephone interview from her Edinburgh office that she believes 2007 will hold similar potential to the 2006 discoveries. "The rate of exploration activity will stay the same."

Sutherland said WoodMac's own early reserve estimates for 2006 discoveries suggest 1.5 billion boe proved and probable reserves in the region. The actual reserves numbers, yet to be booked by the companies, could prove to be smaller, WoodMac noted.

Over the last 10 years, oil and gas reserves found in the deepwater gulf averaged 1.2 billion boe/year. Both 2004 and 2005 marked deepwater reserve additions of less than 1 billion boe.

During 2006, highlights included discoveries by BP PLC at Kaskida and Hess Corp. at Pony. Together these two fields account for more than half of the reserves found in the region last year.

BP E&P Inc. discovered oil with the Kaskida well on Keathley Canyon Block 292. Kaskida encountered 800 net ft of hydrocarbon pay in Lower Tertiary sands. Interests are BP 55%, Anadarko Petroleum Corp. 25%, and Devon Energy Corp. 20% (OGJ Online, Aug. 31, 2006).

Hess said wireline logs of its deepwater Pony prospect on Green Canyon Block 468 indicate 475 ft of oil-saturated sandstones in Miocene age reservoirs. Hess drilled the well to 32,448 ft TD (OGJ, July 24, 2006, Newsletter).

WoodMac noted the number of wells drilled in 2006 increased marginally compared with 2005, while the number of drilling days increased by nearly 30%. Deeper, more complex deepwater exploration led to an average drill time of more than 100 days.

Undoubtedly spurred by successful Lower Tertiary wells in remote areas of the gulf, operators extended their search for the play into waters closer to shore, WoodMac said. BP drilled its Tamara prospect in Garden Banks, north of Keathley Canyon, and Hess spudded a well at Jack Hays in Port Isabel, the most westerly test of the play so far.

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