Upstream News

Apache adds life to UK North Sea fields

Apache Corp. said September 5 that the Beryl Bravo B73y development well in the UK's North Sea tests at 8,161 barrels of oil per day (bo/d) and 5.9 million cubic feet of gas per day (MMcf/d).

The B73y well tested a Nansen reservoir containing 71 feet of net oil pay and began producing at the end of August. The well also encountered 245 feet of net pay in three additional zones that will be produced at a later date. Apache has a 50% interest in the B73y well, which is a follow up to the previously disclosed B72 well that tested in excess of 11,600 bo/d and 13 MMcf/d in May 2012. Similarly, the B72 encountered additional pay behind pipe that will be produced at a later date.

"Our early drilling results at the Beryl field have been excellent," said G. Steven Farris, Apache chairman and chief executive officer, "and we continue to move forward in assimilating the Mobil North Sea assets acquired at the end of 2011."

In addition, 3-D seismic surveys of the Beryl Field began in early August and when completed in mid-October will further refine Apache's future drilling plans there.

The added volumes from the B73y well will mitigate scheduled downtime of other assets in the North Sea from July to September. Hess Corp. is a 22% holder of Beryl.

Apache also said that the jacket for the Forties Alpha Satellite Platform (FASP) has arrived at the Forties Field in the North Sea to become a bridged-linked processing facility and drilling platform. The fully commissioned topside and 90 meter bridge link are scheduled to be delivered during the second quarter of 2013.

FASP will provide Apache with full-fluid processing and contain 18 new production well slots that will facilitate additional drilling in the field commencing in the third quarter of 2013.

Apache acquired the Forties Field in 2003, which the previous operator had forecasted would cease producing this year.

"What's extra special about FASP is Apache is adding another platform in 2012 when the field was projected to have reached the end of its life," said Jim House, Apache's UK North Sea region vice president. "Apache originally purchased 144 MMBoe of proved reserves within the Forties Field at a cost of $667 million and has now produced nearly 190 MMBoe and still has 130 MMboe of proven reserves yet to deliver."

Apache has invested approximately $4.3 billion in the Forties field, adding an estimated 18 years to the field's life.

A new 3-D seismic acquisition survey is planned for 2013 over the Forties Field area that will be converted to a 4-D interpretation, which has been a key driver of success for locating bypassed or un-swept oil reserves.

"APA continues to prove itself adept at squeezing barrels out of fields the bigger guys leave behind. APA bought Beryl and the rest of Exxon Mobil Corp.'s North Sea assets last September for $1.75B in cash - $26/proved boe. APA is hoping to recreate its success in the nearby Forties field, bought from BP plc (BP) in 2003, where APA has just commissioned a new jacket at the Alpha Satellite Platform, providing an additional 18 drilling slots for wells expected to spud in Q3:13. APA has invested ~$4.3 billion at Forties and added roughly 18 years to the field's life," said Global Hunter Securities analysts following the announcement.

Chevron makes natural gas discovery offshore Australia

With its September 19 natural gas discovery announcement, Chevron Corp. marked its fifteenth discovery in Australia since mid-2009. The company's Australian subsidiary made the discovery in the Greater Gorgon Area, located in the Carnarvon Basin.

The Satyr-2 exploration discovery well confirmed approximately 128 feet of net gas pay. The well is located in the WA-374-P permit area approximately 75 miles northwest of Barrow Island off the Western Australian coast. The well was drilled in 3,570 feet of water to a total depth of 12,454 feet.

Chevron Australia is the operator of WA-374-P with a 50% interest while Shell and Exxon Mobil each hold 25%.

Petrobras starts Chinook production in deepwater Gulf of Mexico

Petrobras began production at the Chinook field in the deepwater Gulf of Mexico on September 6. The wells in the field are connected to the FPSO BW Pioneer (a Floating, Production, Storage and Offloading vessel – or FPSO), located about 250 kilometers (about 155 miles) off the coast of Louisiana in the US Gulf of Mexico.

This is the first FPSO to produce oil and gas in the US GoM. It is capable of processing 80,000 barrels of oil and 500,000 cubic meters (17,657,500 cubic feet) of gas per day, and of storing 500,000 barrels of oil. This vessel platform is moored at a world-record water depth of 2,500 meters (8,200 feet).

The Chinook #4 production well was drilled and completed in Lower Tertiary reservoirs (formed between 23 million and 65 million years ago), a promising offshore exploration frontier that is located at a depth of about 8,000 meters (26,240 feet) in the Gulf of Mexico. This well is connected to the vessel platform by means of a system composed of subsea equipment and lines, in addition to free-standing risers (vertical production lines). Oil will be transported to land on shuttle tankers and gas through pipelines.

Petrobras is the first company to develop an oilfield in the Gulf of Mexico using these technologies, which have been successfully applied in offshore Brazil.

Cascade, which initiated production in February 2012, is owned by Petrobras (100%), while Chinook is owned by Petrobras (66.67%) in partnership with Total Exploration Production USA Inc. (33.33%).

Coastal Energy drills successful appraisal well offshore Thailand

Coastal Energy Co. has drilled a successful appraisal well in the Songkhla basin offshore Thailand. The Songkhla A-10 well was drilled to a depth of 7,400 feet TVD and encountered 213 feet of net pay in the Lower Oligocene with 20% porosity. The gross oil column in the well was approximately 550 feet thick. The A-10 well was drilled into the same fault block as the A-12ST#1, which is the easternmost fault block at Songkhla A. The A-12ST#1 originally tested at 3,500 bopd with 105 feet of net pay.

Coastal Energy owns a 100% interest in Blocks G5/43 and G5/50 in the Gulf of Thailand. The current combined area of the blocks is approximately 5,021 square kilometers (1.24 million acres) spanning across the Songkhla, Nakhon and Ko Kra basins.

Halcon sees initial gross production of 942 boe/d from Woodbine completion

Halcon Resources Corp. has completed the AM Easterling-Gresham A 1H in Leon County, Texas. The AM Easterling-Gresham A 1H (92% working interest) was completed in the Woodbine formation and had an initial gross production rate of approximately 942 barrels of oil equivalent per day (Boe/d), or 919 barrels of oil and 139 mcf of natural gas, on a 32/64 choke. Average daily production from the well over its first seven days was approximately 831 Boe/d (97% oil). The well was drilled to a total measured depth of 14,265 feet, including a 6,730 foot lateral, and was completed with 24 stages.

The company is currently running three operated rigs in its Woodbine/Eagle Ford play in East Texas and expects to add two additional operated rigs by mid-September.

Tullow spuds Paipai well in Kenya

Africa Oil Corp. announced the spudding in Kenya of the Paipai-1 exploration well located in onshore Block 10A, on September 29, 2012. The well is planned to drill to a total depth of 13,491 feet (4,112 meters) and will test Cretaceous and Jurassic sandstone targets. The well is operated by Tullow Oil plc with a 50% working interest. Africa Oil holds a 30% working interest in the Block. The Paipai-1 will be drilled using the Sakson PR-5 rig and is targeting gross best estimated prospective resources of 121 million barrels by the company's independent resource evaluator.

Elsewhere in Kenya the company and its partner Tullow continue drilling operations at the Twiga South-1 well site located in Lokichar sub-basin onshore Block 13T and results of this well are expected before the end of October. In onshore Ethiopia, Tullow are finalizing plans to mobilize the OGEC-75 rig for the exploration drilling campaign that is planned to commence with the Sabisa-1 well in the South Omo Block near the end of this year.

Keith Hill, President and CEO of Africa Oil, commented, "Paipai-1 will test a large structural trap in what is considered to be an oil-prone area of the Anza basin. A discovery at Paipai would extend the producing plays of Sudan into Kenya and open a potentially significant and new petroleum province within Kenya where the company is already implementing an accelerated exploration program after the Ngamia-1 discovery in the Tertiary Rift Play earlier in the year."

InterOil begins PNG Antelope appraisal

InterOil Corp. commenced drilling on the Antelope-3 appraisal well in Petroleum Retention License 15 in Papua New Guinea. The plan is to drill the entire reservoir interval with an anticipated total depth of the well of approximately 8,366 feet. The well is expected to take between 60 and 120 days to drill, log and test.

The Antelope-3 well, located approximately .6 miles south of the Antelope-1 well and 1.6 miles north from Antelope-2, is expected to penetrate the top of the carbonate reservoir at approximately 5,545 feet. The Antelope-3 objectives are to: 1) confirm reservoir depth, composition, character and continuity, 2) provide samples for analysis to further assist in development well planning, 3) satisfy work program obligations for PRL 15 and 4) complete the well as a future production well.

The company's Rig#3 will be moved to the Elk-3 drill site once the remaining roadway preparations from the Hou Creek upstream supply base are complete. Drilling of the Elk-3 is the final well required to satisfy the first two year work commitment on PRL 15.