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Knotty Head, Pony finds may be one Gulf of Mexico Green Canyon discoveries could be single reservoir; discoveries in area include Tahiti, Atlantis, Mad Dog, Holstein By Ray Tyson For Petroleum News
Some industry observers believe the Nexen-operated Knotty Head discovery and the Hess-operated Pony discovery actually are part of a single reservoir that could rival the largest oil accumulations found in the Gulf of Mexico’s prolific Green Canyon area.
“We anticipate that it will be all part of the same reservoir,” said Bob Daniels, senior vice president of exploration and production for E&P independent Anadarko Petroleum, a 25 percent stakeholder in Knotty Head.
Neither side has exchanged the necessary geological data to confirm the reservoir linkage. However, “we do have the opportunity in the future to trade data,” Daniels told industry analysts in a July 28 conference call.
Green Canyon already has produced such titan discoveries as Tahiti, Atlantis, Mad Dog and Holstein. If it can be proved Knotty Head and Pony share the same reservoir, a large standalone development could be in the making, based on the limited well results thus far released by the owners. Knotty Head looks major Located on Green Canyon block 512 and just south of Pony on Green Canyon block 468, Knotty Head alone is shaping up into a major field, with an appraisal well encountering around 600 feet of oil sands, double what was uncovered by the initial discovery well. That would rank Knotty Head in the top tier of deepwater discoveries in the Gulf of Mexico based on pay thickness.
Owners hyped Knotty Head as a potentially “world-class” prospect, with pre-drill reserve estimates ranging from 350 million to 1 billion barrels of oil equivalent, truly an elephant by Gulf of Mexico standards. In comparison, BP’s Thunder Horse field in Mississippi Canyon is the largest field ever discovered in the U.S. Gulf with roughly 1 billion barrels of recoverable resource.
Knotty Head also is believed to be the deepest hydrocarbon discovery to date in the Gulf of Mexico. The prospect is in water depths of about 3,500 feet, with the initial wellbore drilled to total depth of more than 34,000 feet.
Chevron owns a 25 percent interest in the Knotty Head prospect. Anadarko, Canada’s Nexen Petroleum Offshore USA and Australia’s BHP Billiton each hold a 25 percent stake in the prospect. Chevron operates the wells and Nexen operates the prospect. Additional pay at Pony Hess also found additional pay at its 100 percent owned Pony prospect. The company reported 300 feet of initial oil sands at the well’s 29,658-foot level and 475 feet of pay at the 32,448 foot level, an increase of 175 feet.
Hess plans to drill an appraisal sidetrack well roughly 4,000 feet to the northeast of the Pony discovery well, to help gauge reservoir size. Hess’ current reserve estimate for Pony is wide ranging, from 100 million to 600 million barrels of oil equivalent.
On a related subject, Anadarko said it was awarded the remaining two blocks of the 13 blocks it won in Central Gulf of Mexico Lease Sale 198 held in March. Included was the Lyell prospect which is in close proximity to and targets the same Miocene pay zones discovered at Knotty Head and the nearby Tahiti and Tonga fields. The prospect is owned 50-50 by Anadarko and fellow E&P independent Newfield Exploration.
In the Eastern Gulf of Mexico, a well test on the Vortex gas discovery produced a surprising 60 million cubic feet per day, “providing further confidence that we can meet our volume expectations on this project,” said Jim Hackett, Anadarko’s chief executive officer. Vortex to be tied to Independence Hub Vortex, on Atwater Valley block 261, is one of 10 gas wells from various fields that will be tied to Independence Hub. When the hub comes online in the second half of 2007, it will be able to process up to 1 billion cubic feet of gas per day. Anadarko holds interests in seven of the 10 discoveries that will feed the hub, totaling more than 1 trillion cubic feet of gas reserves. Anadarko will operate the hub with 49 percent of the capacity.
Meanwhile, pipe laying vessels Allseas Solitaire and Lorelay finished installing the Vortex, Jubilee, Cheyenne, Spiderman and San Jacinto flow lines, leaving the Atlas-Mondo and infield flow lines to be completed, Anadarko said, noting that the Cheyenne sub-sea tree was installed and tested in 9,000 feet of water depth, setting a world record as the deepest sub-sea tree installation.
Additionally, crane vessel Heerema Balder completed installation of 12 mooring piles for Independence Hub, Anadarko said. The company said that the Allseas Solitaire completed installation of the “deep-lay” portion (86 miles) of the 24-inch Independence Trail gas export pipeline.
Independence Hub’s hull was transported from Singapore to the Kiewit shipyard in Ingleside, Texas, where it is being mated with topsides and prepared for installation later this year.
In addition to Anadarko, the so-called Atwater Valley Producers Group is made up of Dominion Exploration & Production, Kerr- McGee, Hydro Gulf of Mexico, Devon Energy and Energy Resources Technology, a wholly owned subsidiary of Cal Dive International. Anadarko’s already substantial interest in the Independence Hub project would increase should regulators and shareholders approve Anadarko’s bid to acquire Kerr-McGee.
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