Upstream News
Chevron, YPF agree to develop Vaca Muerta shale
A subsidiary of Chevron Corp. (NYSE: CVX) signed an agreement with affiliates of the Argentine oil company YPF SA (NYSE: YPF) on July 16 that furthers the development of shale oil and gas resources from the Vaca Muerta formation located in the Neuquén province.
The agreement calls for initial outlays of approximately $1.24 billion to enable the first phase of development in the Loma La Lata Norte and Loma Campaña areas. The initial program will include the drilling of 100 wells in a 5,000-acre tract, part of a 96,000-acre concession.
"This strategic investment will allow Chevron to take part in the Vaca Muerta, one of the most exciting shale oil and gas plays in the world today," said George Kirkland, vice chairman of Chevron Corp.
"It provides Chevron with a new opportunity to profitably grow production beyond our 2017 production target of 3.3 million barrels per day."
The Loma La Lata field is currently producing more than 10,000 barrels of oil-equivalent per day.
Chevron Argentina currently produces an average of 21,000 barrels of crude oil and 4 million cubic feet of natural gas in the Neuquén Basin, where it holds operated interests ranging from 18.8% to 100%.
Apache confirms gas discovery offshore Western Australia
The Australian subsidiary of Apache Corp. (NYSE, Nasdaq: APA) confirmed a natural gas discovery at its operated Bianchi-1 well in Retention Lease WA-49-R, located in the Carnarvon Basin offshore northwest Australia.
Bianchi-1 was drilled to a total depth of 17,717 feet subsea, and final information regarding the well is being assessed. The well encountered approximately 367 feet (112 meters) of net natural gas pay in eight reservoir zones between 15,577 and 17,530 feet subsea in the Triassic-aged Mungaroo formation.
Bianchi-1 was drilled using the Ocean America semi-submersible deepwater drilling rig, which remains on location completing wireline logging and other information-gathering operations. Bianchi-1 adds to previous Apache exploration success in this part of the Carnarvon Basin following the Zola discovery in 2011. Zola is a natural gas discovery that Apache announced in 2011, located 4 miles southwest of the Bianchi discovery. The data from these wells, along with the Apache-operated Olympus gas discovery drilled in an adjacent permit earlier this year, provides critical insights into hydrocarbon distribution in the area.
"Bianchi is an important well for Apache, providing further understanding of the development options with the greater Zola area," said Faron Thibodeaux, managing director of Apache in Australia.
"Evaluation of these recent discoveries is at an early stage and is being undertaken to assess potential commercial opportunities," Thibodeaux said.
The Bianchi-1 is part of Apache's ongoing exploration program across the Carnarvon Basin of Western Australia. During 2013, Apache plans to invest approximately US$1.9 billion for drilling, recompletion projects, development projects, equipment upgrades, production enhancement projects and seismic acquisitions.
Apache is the operator of Bianchi-1 (30.25% holding). Other parties in the joint venture are Santos (24.75%), OMV Australia (20%), JX Nippon (15%) and Tap Oil (10%). Apache acquired the interest in the field as part of a number of acreage acquisitions completed since 2010 that increased the company's gross acreage in Australia.
Currently, Apache has interests in more than 31,000 square kilometers of northwest Australian offshore acreage including exploration permits and production licenses.
Santos makes gas discovery at Winchester in the Carnarvon Basin
Santos discovered gas at the Winchester-1 exploration well in WA-323-P, located in the Carnarvon Basin offshore Western Australia.
Winchester is Santos' fourth consecutive exploration gas discovery offshore Western Australia, following successes at Crown, Bassett West and Bianchi.
Wireline logging and pressure testing has confirmed 40 meters of net gas pay in the Jurassic Angel and Triassic Mungaroo formations between 3,614 and 3,721 meters. Multiple gas samples have been recovered and are being analyzed.
Winchester is located approximately 135 kilometers northwest of Dampier in a water depth of 75 meters.
Santo's Head of Exploration Bill Ovenden said wireline logging has confirmed a gas discovery with excellent reservoir quality at Winchester.
"Winchester-1 will now be deepened to evaluate the gas-bearing potential of further objectives within the Mungaroo section," he said.
Santos vice president Western Australia and Northern Territory John Anderson said a gas discovery at Winchester is a significant outcome, and potential commercialization options could include the expansion of Santos' existing production through jointly owned infrastructure, or alternatively via proximal existing third party LNG infrastructure, which surrounds WA-323-P.
Santos holds 75% of WA-323-P and is the operator. The remaining interest is held by Octanex NL.
Shell eyes GoM, Brazil projects to enhance offshore portfolio
Shell has drilled a successful exploratory well at Vicksburg in the deepwater Gulf of Mexico and has made the decision to move forward with two projects at existing developments offshore Brazil.
In the Gulf of Mexico, the Vicksburg well is located 75 miles offshore in the Mississippi Canyon Block 393 in 7,446 feet of water. It was drilled to a total depth of 26,385 feet and encountered more than 500 feet of net oil pay.
In total, the Vicksburg "A" discovery is estimated to hold potentially recoverable resources of more than 100 million barrels of oil equivalent (MMboe). It adds to the more than 500 MMboe of potentially recoverable resources that have already been discovered and appraised at the nearby Appomattox discovery. Vicksburg "A" is a separate accumulation from both Appomattox and the 2007 Vicksburg "B" discovery.
"The results of the Vicksburg well strengthen our existing deepwater Gulf of Mexico exploration portfolio and should contribute to the nearby Appomattox discovery," said Mark Shuster, executive vice president Shell Upstream Americas Exploration.
AT LEFT: FPSO Fluminese Bijupirá/Salema fields, Brazil Photo courtesy of Shell
Shell (the operator with a 75% interest) and Nexen, a wholly-owned subsidiary of CNOOC Limited, (25% interest), are following up the Vicksburg "A" well with a sidetrack well to test the Corinth prospect, a separate fault block from the Vicksburg discovery. Further exploration drilling targeting tie-backs to Appomattox will follow.
Brazil
In Brazil, Shell and its partners are expecting to boost production with two new deepwater projects at Parque das Conchas (BC-10) and the Bijupirá/Salema fields.
"Offshore Brazil is a key part of our plans to grow our deepwater portfolio - a key component of our global strategy," said John Hollowell, executive vice president for Deep Water, Shell Upstream Americas. "We look forward to continuing the work with our partners in offshore Brazil to develop the resources in a safe and responsible way."
For Parque das Conchas (BC-10), Shell and its partners Petrobras and ONGC, have decided to move forward with Phase 3 of the project, which will include the installation of subsea-infrastructure at the Massa and Argonauta O-South fields. These fields will be tied-back to the Espírito Santo - the floating, production, storage and offloading vessel (FPSO) - that is at the center of the Parque das Conchas development.
Once online, Phase 3 of the BC-10 project is expected to reach a peak production of 28,000 barrels of oil equivalent (boe) per day (Shell share 50%, Petrobras 35%, ONGC 15%). Since coming on-stream in 2009, the BC-10 project has produced more than 70 MMboe. Phase 2 of the project, to tie-in the Argonauta O-North field, continues to progress and is expected to come online late 2013 with a peak production of 35,000 boe per day (Shell share 50%, Petrobras 35%, ONGC 15%).
At the Bijupirá/Salema fields, a re-development is underway that includes the drilling of four new production wells. This is expected to boost production from these fields to a peak of 35,000 boe per day in 2014 (Shell share 80%, Petrobras 20%). The Bijupirá/Salema fields have produced close to 100 million boe since startup in 2003.
Briefs
Halliburton resolves DoJ's Deepwater Horizon investigation
Halliburton (NYSE: HAL) has reached an agreement with the US Department of Justice (DoJ) to conclude the department's criminal investigation of the company in relation to the April 20, 2010, incident involving the Macondo well in the Gulf of Mexico.
A Halliburton subsidiary has agreed to plead guilty to one misdemeanor violation associated with the deletion of records created after the Macondo well incident, to pay the statutory maximum fine of $200,000, and to accept a three-year term of probation
W&T Offshore makes subsalt discovery beneath Mahogany Field
W&T Offshore Inc. (NYSE: WTI) has made a subsalt discovery in a deep-shelf exploratory target beneath its Ship Shoal 349 field (Mahogany Field) in the US Gulf of Mexico.
The company's SS 359 A-14 well is currently producing from the targeted T-Sand (in excess of 17,200 feet total vertical depth), at an initial flowback rate of 3,030 barrels of oil per day and 5.6 MMcf of gas per day (4,000 boe/d total - 3,310 boe/d net of royalty to W&T) with a flowing tubing pressure of roughly 9,400 psi surface pressure.
In total, the well logged over 370 feet of net oil pay, with the T-Sand accounting for 108 feet of the total net pay. Success from the A-14 T-sand will stimulate additional drilling in 2014 to exploit the four newly discovered oil sands that were encountered in the A-14 well.
W&T holds a 100% working interest in the field.