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July 2008

Vol. 13, No. 27 Week of July 06, 2008

Deepwater wells prove up discoveries

Stones, Pony prospects in U.S. Gulf appear confirmed by exploration, appraisal drilling; significant reserve possible at Stones

Ray Tyson

For Petroleum News

Exploration and appraisal wells appear to confirm important deepwater oil discoveries at the Stones and Pony prospects in the U.S. Gulf of Mexico.

Stones minority partners Petrobras and Eni reported that their Stones-3 well on Walker Ridge Block 508 demonstrated the potential for a significant reserve, but did not disclose any reserve estimates.

“This result confirms the potential of significant oil reserves in this type of reservoir in the Gulf of Mexico,” Petrobras said in a regulatory filing.

The Stones-3 well, drilled in 7,500 feet of water, is about 200 miles off the coast of Louisiana. The well was drilled just north of the Stones-1 discovery well, encountering “multiple oil-bearing sands” on its way to a total depth of about 29,400 feet.

“The well data will now be analyzed whilst future drilling activity is currently being planned to further define the size of the discovery,” Eni said.

Eni owns a 15 percent working interest in Stones. The other partners are Royal Dutch Shell Plc, the main operator with a 35 percent holding; Marathon Oil Corp. with 25 percent; and Brazil’s Petrobras at 25 percent.

Eni holds a considerable exploration portfolio in this area, with several new opportunities being matured for future drilling, the company said. In fact, the Stones unit, consisting of 10 blocks, was part of an exploration portfolio acquired by Eni in July 2007 from Dominion. The Stones discovery itself is near other large Lower Tertiary discoveries in deep reservoir sands, such as St. Malo (in which Eni participates) and the Petrobras-operated Chinook and Cascade fields. Eni also owns interests in 158 leases on the North Slope of Alaska.

Pony sidetrack completed

In a separate development, Hess Corp. successfully completed a sidetracked appraisal well at its Pony discovery on Green Canyon Block 468, the company said. The well was drilled by Diamond Offshore’s semi-submersible Ocean Baroness in 3,400 feet of water.

The Pony No. 2 sidetrack encountered the same objective sands as Pony No. 1 and No. 2 wells, Hess said, adding that the sidetracked appraisal well reached a measured depth of 33,362 feet from a surface location 7,400 feet northwest of the discovery well.

“The main pay sand was oil-filled throughout the interval drilled,” Hess said.

The appraisal well is part of a comprehensive ongoing data gathering program that is being conducted over the Pony prospect, which is 100 percent owned by Hess. Recoverable resources were estimated to be around 200 million barrels of oil equivalent.

The company said it was evaluating development concepts for production from the Pony prospect before making a final investment decision.

Some industry observers initially believed the Nexen-operated Knotty Head discovery on Green Canyon Block 512 and the Pony discovery actually were part of a single reservoir that could have rivaled some of the largest oil accumulations found in the Gulf of Mexico’s prolific Green Canyon area, including such titan discoveries as Tahiti, Atlantis, Mad Dog and Holstein.

At the time Hess’ reserve estimate for Pony ranged widely from 100 million to 600 million barrels of oil equivalent. And the company had reported 300 feet of initial oil sands at that well’s 29,658-foot level and 475 feet of pay at the 32,448-foot level, an estimated increase of 175 feet from earlier drilling results.

The initial well at the Knotty Head prospect encountered about 600 feet of net oil pay in multiple zones. Nexen’s resource estimate for the field ranged from 200 million to 500 million barrels of oil equivalent.






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