Providing coverage of Alaska and northern Canada's oil and gas industry
May 2006

Vol. 11, No. 21 Week of May 21, 2006

Deepwater oil, gas Gulf finds announced

Kerr-McGee scores back-to-back discoveries, validating company’s new ‘sub-salt’ strategy on Atwater Valley, Green Canyon blocks

Ray Tyson

For Petroleum News

E&P independent Kerr-McGee, among the more successful deepwater explorers in the Gulf of Mexico, said it made back-to-back discoveries — one natural gas and the other oil — at its Claymore prospect on Atwater Valley Block 140 and on its Caesar prospect on Green Canyon Block 683.

The discoveries essentially validate the transition of Kerr-McGee’s deepwater exploratory program into the Gulf’s tricky sub-salt play, which for years has given explorers fits because of seismic imaging distortions below the thick salt layers that cover much of the Gulf.

“With the success of these first two wells, we are very excited about the enviable inventory of high-impact targets that our exploration team has assembled,” Dave Hager, Kerr-McGee’s chief operating officer, said May 17.

Caesar encountered oil

The Caesar No. 1 exploratory well, in about 4,500 feet of water, was drilled to a total depth of 29,721 feet and encountered quality oil pay, Kerr-McGee said, adding that the company would immediately core the productive interval, then sidetrack the well roughly 4,000 feet to the north to better determine Caesar’s potential resources.

Development options will be evaluated and could include a sub-sea tieback to Kerr-McGee’s 100 percent-owned Constitution spar, just nine miles to the west of the Caesar discovery on Green Canyon Block 680.

Upon completion of the Caesar operation, Kerr-McGee said it would move the drilling rig to the company’s Mission Deep prospect on Green Canyon Block 955.

Claymore a gas find

Just a week before unveiling the Caesar discovery, Kerr-McGee announced the natural gas find at Claymore in Atwater Valley. The Claymore No. 1 well was drilled to a total depth of roughly 25,000 feet and encountered more than 150 feet of net pay in multiple zones, the company said. Claymore was the first well in Kerr-McGee’s 2006 sub-salt program.

“This discovery provides momentum as we execute our exploration program that includes four to five additional high-impact sub-salt targets this year,” Kerr-McGee’s Hager said.

Well data from the Claymore indicates the reservoir contains dry gas with “very high rock quality,” Hager said. Once Kerr-McGee completes evaluation work on the No. 1 well the company will drill a sidetrack appraisal well about 4,600 feet to the northeast of the discovery well to test the down-dip limit of the reservoir and to define the aerial extent and potential resources, he added.

Claymore is in about 3,700 feet of water about 150 miles southeast of New Orleans. Kerr-McGee operates Claymore with a 33.5 percent working interest. Partners in the discovery include Dominion Exploration & Production, with a 31.5 percent working interest, Statoil Gulf of Mexico with a 25 percent interest and Woodside Energy (USA) with a 10 percent working interest.

Once the rig finishes the Claymore appraisal well, it is expected to move to the Norman prospect on Garden Banks block 434. Kerr-McGee operates Norman with a 35 percent working interest.

Kerr-McGee also is drilling the Grand Cayman prospect located on Garden Banks blocks 517, 518, 561 and 562. Grand Cayman is a 32,000-foot Miocene test operated by Kerr-McGee with a 35 percent working interest.

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