Upstream News
Petrobras makes large discovery in Keathley Canyon concession, GoM
Petrobras has made two major oil discoveries and a gas discovery in ultradeep Hadrian area waters, in the Keathley Canyon concession, in the US portion of the Gulf of Mexico. Recoverable volumes are estimated in excess of 700 million barrels of oil equivalent in the Keathley Canyon blocks, among the biggest discoveries made in the Gulf of Mexico in the last decade.
The Hadrian discoveries are located about 400 km (250 miles) southwest of New Orleans at 2,100 meters (7,000 feet) water depth. Preliminary assessments point to the existence of an important cluster of hydrocarbon discoveries in this region.
The discovery was made by drilling well KC919# 3, in block KC 919, and confirmed over 144 meters (475 feet) of net oil pay. Deeper targets are yet to be drilled.
Previous drilling activities had already encountered oil in blocks KC 919 and KC 918 - Hadrian North - and gas in blocks KC 963 and KC 964 - Hadrian South. In Hadrian North, high-quality oil and associated gas were found in the reservoirs, with over 167 meters (550 feet) of oil pay and a minor amount of gas with significant upside potential. In Hadrian South, almost 61 meters (200 feet) of natural gas pay were discovered.
ExxonMobil is the operator with a 50% working interest in blocks KC 918, KC 919, KC 963, and KC 964. Petrobras America Inc., a Petrobras subsidiary headquartered in Houston, Texas, holds 50% stakes in block KC 918 and 25% in blocks KC 919, KC 963, and KC 964. The remaining 25% are held by Eni Petroleum US LLC.
IP rate of Apache North Sea Forties well highest from field in 20 years
Apache Corp. released results of two development wells completed in June at the company's Forties field in the UK sector of the North Sea.
Charlie 4-3 commenced production at a rate of 12,567 barrels of oil per day (b/d). This well's initial production (IP) rate is the highest in the Forties since 1990 and follows the previously disclosed Charlie 2-2, which was completed in March with an IP rate of 11,876 b/d.
Delta 3-5 commenced production at 8,781 b/d.
Apache acquired a new 4-D (time-lapse) seismic survey over Forties during 2010, which enhances the company's ability to identify accumulations of by-passed oil within the field area. Charlie 4-3 and Delta 3-5, the eighth and ninth development wells brought on production at Forties during 2011, successfully targeted two of these accumulations. Additional 4-D driven targets are being identified across the field. Apache expects to drill a total of 16 wells in the Forties field during 2011.
"The safe and very successful delivery of our 2011 drilling program reflects the experience, teamwork, technical skill and commitment of the Apache North Sea region," said James L. House, region vice president and managing director of Apache North Sea Ltd.
When Apache acquired Forties in 2003, the field was producing 40,000 b/d. With the onset of these new wells in mid-June, gross daily production rates have reached as high as 70,000 barrels of oil equivalent, even with output constraints due to construction projects and temporary pipeline closures. At the Charlie platform alone, Apache development drilling has increased production from a low of less than 5,000 b/d in 2006 to a present rate of approximately 30,000 b/d. Apache expects full transmission capacity to become available during the third quarter as planned repair and maintenance work is completed and the Bravo pipeline comes back online.
Apache owns a 97.14% interest in the Forties field. Forties is the largest single oil accumulation discovered in the United Kingdom sector of the North Sea and 40 years after its discovery is the second-highest producing oil field.
Chesapeake Springer well hits 60 bcf of cumulative production
On July 18, Chesapeake Energy announced that its Buffalo Creek 1-17 well located in Beckham County, Oklahoma, surpassed cumulative gross production of more than 60 billion cubic feet of natural gas (bcf).
Chesapeake originally spud the well in May 2002 and reached a total depth of approximately 21,000 feet in the Cunningham Sand of the Deep Springer formation with first sales commencing in December 2002. The well averaged approximately 41 million cubic feet of natural gas (mmcf) per day for the first two years of production and is still producing approximately 8 mmcf per day.
Total gross capital expenditures to drill and complete the well were $8.5 million and subsequent operating expenses have been $1.4 million, or $0.024 per thousand cubic feet of natural gas equivalent (mcfe). Total gross revenue has been approximately $320 million, which includes approximately $65 million paid to royalty owners and approximately $15 million paid in severance tax to the state of Oklahoma. Total net cash flow from the well to the working interest owners has been approximately $230 million, or a multiple of 27 times the original cost of drilling and completing the well, and the realized price per mcfe has averaged $5.35.
Aubrey K. McClendon, Chesapeake's CEO, commented, "The Buffalo Creek 1-17 has certainly been a special well in the history of Chesapeake. As early pioneers drilling deep conventional wells using 3-D seismic in the Anadarko Basin, the success of the Buffalo Creek 1-17 well initiated a process almost 10 years ago that has now led to Chesapeake owning the largest leasehold position in the Anadarko Basin. This industry-leading leasehold position has proved to be exceedingly valuable as unconventional plays such as the Granite Wash, Cleveland and Tonkawa plays have emerged in areas in and around our traditional strongholds of conventional Anadarko Basin production. We believe that this is only the sixth well in Oklahoma history to reach this remarkable milestone of 60 bcf of cumulative production and Chesapeake now operates four of the six most prolific natural gas wells ever drilled in Oklahoma."
The company will continue to pursue ultra-deep 3-D based Deep Springer drilling in the Anadarko Basin and currently operates three rigs in the play. McClendon said the company believes a minimum of another 185 wells can be drilled on its Deep Springer leasehold in the coming years.
Chesapeake maintains the largest leasehold position in the Anadarko Basin with 1,990,000 net acres with 75,000 net acres and three operated rigs targeting the Deep Springer Formation where the Buffalo Creek 1-17 well was drilled.
Chesapeake operates Buffalo Creek 1-17 well with an 82.6% working interest and a 65.8% net revenue interest.
Shell principles provide framework, accountability for global tight/shale oil and gas operations
In response to public concern about tight/shale oil and gas development, particularly regarding hydraulic fracturing, Shell is making its Global Onshore Tight/Shale Oil and Gas Operating Principles available to the public with examples of how the company delivers them. The announcement was made from the 2011 Aspen Ideas Festival in on June 26. According to Shell, the company has a rigorous set of five global operating principles that provide a tested framework for protecting water, air, biodiversity, and the communities in which it operates.
By sharing these operating principles, Shell is hoping to "drive continuous improvement" and says it not only encourages feedback and challenge from its stakeholders, but supports regulation and enforcement that "reinforces responsible operating practices and continues to improve the industry's overall performance."
"We understand there is concern around the development of shale gas, and we must give the public more knowledge of how we operate," said Marvin Odum, president, Shell Oil Company. "People have asked the industry for transparency; we have listened and are responding."
Water usage in hydraulic fracturing is one of the major concerns surrounding the practice. Addressing these concerns, Shell outlined a few of its efforts, noting that the company mandates a stringent well construction standard that focuses on the use of safe drilling and completion processes, including reducing the risk of water contamination.
Further, it said, Shell supports the disclosure of chemicals used in hydraulic fracturing fluids, monitoring of groundwater, and a reduction in the amount of water used in the drilling process. The company noted it does not fracture wells unless it has pressure tested the wellbore, and makes an effort to recycle as much water as possible on each project. In the Marcellus Shale, the company noted, almost 100% of produced fluids are recycled.
In the last decade, the industry has discovered an abundance of natural gas. Of the world's 250-year supply of gas estimated by the International Energy Agency (IEA), almost half is contained in shales, tight sandstones, and coal beds. More than one-third of the global gas-production increase, forecasted by the IEA over the next 25 years, could come from these sources.
"If the innumerable benefits of natural gas are to be realized, we must address the concerns of citizens and share the principles that we hold ourselves to at Shell," said Odum. "These principles manage the risk we know exists when producing energy, but just as importantly, they demonstrate our operational integrity and focus on collaboration, underpinning our belief that natural gas can be produced safely and responsibly."
PetroQuest Energy makes discovery at La Cantera prospect
PetroQuest Energy, Inc. has made a discovery at its La Cantera Prospect located in Vermilion Parish, LA. The company holds an approximate 16% net revenue interest in the well, which reached a total depth of 18,550 feet and logged 232 gross feet (176 feet net) of highly resistive sand within the primary Cris R Massive objective. As a result of stuck pipe in the bottom 550 feet of the well, the ccompany was only able to obtain porosity information in the upper portion of the logged sands which confirmed 37 feet of net commercial pay. PetroQuest is currently side tracking the wellbore in order to fully evaluate the entire sand package and test deeper objectives. The well has a proposed vertical depth of 19,300 feet and is expected to be on production during the fourth quarter.
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