Second K2 appraisal well on Green Canyon Block 562 confirms significant discovery

Agip Petroleum Co. Inc. has drilled another successful deepwater subsalt appraisal well on the K2 discovery on Green Canyon Block 562 in the Gulf of Mexico, about 180 miles south of New Orleans, reported partner Anadarko Petroleum Corp. Tuesday.

May 28, 2003

2 min read

By OGJ editors

HOUSTON, May 27, 2003 -- Agip Petroleum Co. Inc. has drilled another successful deepwater subsalt appraisal well on the K2 discovery on Green Canyon Block 562 in the Gulf of Mexico, about 180 miles south of New Orleans, reported partner Anadarko Petroleum Corp. Tuesday.

Agip spudded the K2 No. 3 well in February in about 3,900 ft of water. Drilled to more than 27,000 ft TD, the well encountered 208 ft of oil pay in two sands with no oil-water contact, confirming prior estimated gross reserves of about 100 million boe and suggesting additional reserve potential. The well extended the limit of the proven oil column downdip an additional 800 ft on the K2 structure.

Development options include a separate structure or a tieback to nearby Marco Polo, which Anadarko will install and operate late this year (see map). [Insert map] First production from K2 could be late 2004 or early 2005.

The No. 1 well and sidetrack were drilled on the same block in 1999, about 4,000 ft away. The wells encountered only one zone with average net pay of 60 ft. In September 2002, the No. 2 well found a total of 339 ft of pay. It also was sidetracked updip to evaluate the extent of the discovery and encountered 84 ft of net pay from three intervals.

Operator Agip holds 18.2% of the field, Anadarko holds a 52.5% working interest, ConocoPhillips 16.8%, and Unocal Corp. 12.5%.

"The K2 No. 3 appraisal well was intended to confirm the northwestern edge of the field, but the field extends even deeper and farther beyond what we had predicted," said Anadarko Chairman, President and CEO Robert J. Allison, Jr. "In fact, the outermost limits of K2 are still unknown," he added.

Later this summer, Anadarko plans to drill an exploration well on the northern adjacent block, Green Canyon Block 518, in which it holds a 100% working interest.