Unocal starts gas production from Muni field

Unocal Corp. said Monday that its Spirit Energy 76 subsidiary has brought its Muni discovery in the Gulf of Mexico on production ahead of schedule and under budget. It expects production at Muni to exceed 120 MMcfd by year's end.

Spirit Energy 76, the Sugar Land, Tex.-based subsidiary of Unocal Corp., said Monday it's brought the Muni discovery in the Gulf of Mexico shelf on production ahead of schedule and under budget and expects production to exceed 120 MMcfd by yearend.

One well is producing, and two additional wells will be flowing natural gas by the end of October. Muni is one of the largest natural gas discoveries made on the gulf shelf in recent years, with a gross resource potential of 100-160 bcf. Unocal holds a 100% working interest in this new field.

"The Muni development demonstrates our ability to make significant reserve additions in the mature (gulf) shelf and rapidly capitalize on the improved price environment," said Timothy H. Ling, Unocal executive vice president for North American Operations. The first production at Muni comes just 10 months after the field was discovered in December 1999, Ling said.

The company acquired the Ship Shoal 295 lease in federal lease sale 172 in March 1999.

Spirit Energy commissioned a project team to work on a fast-track development of the field in order to benefit from rising natural gas prices.

Unocal made the decision to move ahead with the development in March 2000, and the company awarded contracts to design and fabricate production facilities in time for a planned December 2000 startup.

The platform, facilities and export pipeline were installed and tested in August, two months ahead of schedule. Unocal expects that project development costs for the Muni development through 2000 will total less than $50 million.

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