SHELL PLANS GULF'S SECOND SUBSALT DEVELOPMENT

Shell Offshore Inc. and partners have announced a $240 million development plan for a five tract area in the Gulf of Mexico that includes the gulf's second commercial subsalt discovery.

Development of Enchilada field is to get under way in late 1996 with installation of a conventional fixed platform in 630 ft of water on Garden Banks Block 128, about 185 miles southwest of New Orleans. That structure is to serve as a gathering point for production from Enchilada field development and as a transportation hub for other oil and gas projects in the Garden Banks and Green Canyon federal planning areas. First production is expected in early 1997.

Partners later will install a second platform in the field on Garden Banks Block 172. Other major development plan components include:

A 20 in. oil pipeline from Enchilada A platform to a Shell platform on Eugene Island Block 331.
A 30 in. gas line from A platform to a new Shell platform in the South Marsh Island planning area.

Enchilada operator Shell and partners Amerada Hess Corp. and Pennzoil Co. still are evaluating the discovery. But estimated reserves are 400 bcf of gas and 25 million bbl of oil and con- densate. Shell said ultimate recovery could exceed 100 million bbl of oil and gas equivalent.

When fully developed Enchilada is expected to produce as much as 300 MMcfd of gas and 40,000 b/d of oil and condensate.

ENCHILADA ACTIVITY REVIEWED

The Enchilada development is a combination of two subsalt discoveries and a conventional find on Garden Banks Blocks 83, 84, 127, 128, and 172. Water depths across the property are 625- 750 ft.

Shell drilled the Enchilada subsalt discovery well in early 1994 on Garden Banks 128 and followed that discovery with Chimichanga subsalt discovery in early 1995 on Garden Banks Block 127. Also in early 1995, Amerada Hess drilled the Salsa discovery well on Garden Banks 172.

The thickness of the productive formation is 114-150 ft in reservoirs at 12,000-15,000 ft true vertical depth. The oil reportedly has gravity averaging 28 and a sulfur content of less than 1%.

Working interests are: Blocks 83 and 84 Shell 100%; Blocks 127 and 128 Shell 55%, Amerada Hess 25%, and Pennzoil 20%; Block 172 Amerada Hess 60% and Shell 40%.

Shell acquired three of the tracts in the Minerals Management Service central gulf sale in 1989. It acquired Block 83 for a bonus bid of $1,707,000, Block 84 for $757,000, and Block 127 for $207,000. Pennzoil acquired Block 128 at the 189 sale for $151,221. Amerada Hess won Block 172 at the 1993 central gulf sale with an offer of $1,210,000.