Chevron, Anadarko post GOM successes

Buckskin, Shenandoah discoveries further validate U.S. Gulf’s huge Lower Tertiary play; 2006 Jack test encouraged explorers

Ray Tyson

For Petroleum News

Recently announced Lower Tertiary discoveries at the Buckskin and Shenandoah prospects appear to further validate the enormous reach and prolific nature of this hottest of emerging oil plays in the deepwater Gulf of Mexico.

In fact, majority owner Chevron compared Buckskin to its 2004 Jack discovery, a significant find 44 miles east of Buckskin.

In 2006, a rare and expensive production test performed at Jack — the first of its kind conducted on a Lower Tertiary discovery in the U.S. Gulf — produced strong flow rates that encouraged Chevron and other explorers to continue pursuing Lower Tertiary prospects in this massive but financially risky trend, where exploration wells can cost more than $100 million a pop.

The Jack No. 2 well was completed and tested in 7,000 feet of water, with more than 20,000 feet under the sea floor for a total depth of 28,175 feet, breaking Chevron’s 2004 Tahiti well test record in Green Canyon as the deepest successful well test in the Gulf of Mexico. More important, the well flowed at more than 6,000 barrels of oil per day, an impressive rate considering only 40 percent of Jack’s estimated 350 feet of hydrocarbon pay was tested.

The Buckskin No. 1 discovery well, on Keathley Canyon block 872 about 190 miles southeast of Houston, also encountered more than 300 feet of net pay, Chevron reported, noting that the well is located in about 6,920 feet of water and was drilled to a depth of 29,404 feet. More tests are being conducted on data gathered from the Buckskin discovery well, and additional work will be needed to determine the extent and commercial viability of the discovery, Chevron said.

“This is a very significant discovery in the Lower Tertiary trend,” George Kirkland, Chevron’s executive vice president of global upstream and gas, said of its latest discovery. “Buckskin reinforces the trend’s potential to provide the United States with important new energy supplies.”

Billions of barrels

Spain’s Repsol, with a 12.5 percent working interest in the prospect, was the operator of the Buckskin discovery well. However, Chevron, with a 55 percent working interest, will become operator and conduct all future work, the company said. Other Buckskin co-owners are Maersk Oil America with a 20 percent working interest, and Samson Offshore Co. with a 12.5 percent working interest.

Another Anadarko find

Meanwhile, Anadarko announced its Shenandoah discovery in Walker Ridge block 52. The discovery well also encountered net oil pay in the Lower Tertiary approaching 300 feet, the company said.

“Initial data indicates the Shenandoah discovery has reservoir properties that appear to be of much higher quality than industry has seen previously in the emerging Lower Tertiary play,” said Bob Daniels, Anadarko’s senior vice president of worldwide exploration.

Shenandoah is in about 5,750 feet of water and was drilled to a total depth of about 30,000 feet. Anadarko said it and the co-owners of the discovery are evaluating the well results and the next steps toward future appraisal activity.

Anadarko operates Shenandoah with a 30 percent working interest. Co-owners of the discovery include ConocoPhillips with a 40 percent working interest, Cobalt International Energy, L.P. with a 20 percent working interest, and Marathon Oil with a 10 percent working interest.

The Kaskida oil discovery, in Keathley Canyon block 292, was Anadarko’s first venture into the U.S. Gulf’s Lower Tertiary play. Anadarko, with a 25 percent stake in Kaskida, was said to be among an undisclosed number of other non-Jack owners who bought into the Jack production test results. The Kaskida discovery well not only encountered an eye-popping 800 feet of hydrocarbon-bearing sands, but also helped confirm the Lower Tertiary’s broad reach. Kaskida is 80 miles northwest of Jack and was the first Lower Tertiary discovery in Keathley Canyon.

Also in the deepwater Gulf of Mexico, Anadarko said it expects to spud the Vito middle-Miocene prospect in Mississippi Canyon Block 984 and the Samurai middle-and-lower-Miocene exploration well in Green Canyon block 432 during the 2009 first quarter. Anadarko operates Vito with a 20 percent working interest and Samurai with a 33.33 percent working interest.