Devon Energy and other explorers with discoveries in the Gulf of Mexico’s lower tertiary trend are said to be discussing the possibility of conducting a rare and expensive deepwater production test on the trend before moving ahead with various field developments.
Explorers hardly ever resort to deepwater flow testing to determine a reservoir’s productivity, largely because of the expense and the lengthy time required to prepare for the test.
Industry also has argued that flow testing in deepwater is unnecessary with today’s sophisticated seismic technology and downhole tools that can provide accurate readings on fluids, pressures and other reservoir characteristics.
Nevertheless, because of the size and depth of lower tertiary prospects that would cost billions to bring into production, “you want to make sure you’re right,” Devon President John Richels told industry analysts Sept. 16 at the Peters & Co. Ltd. 2004 North American Oil & Gas Conference. “That’s not just for us. That’s for everyone playing in the trend.” Devon is hoping a production test would be conducted within the next six to eight months, Richels said, adding that such an effort would cost around $30 million.
“It’s an important step but also quite expensive,” Richels said. “But we need to see a production test and that’s something we’re moving towards doing.”
Just what lower tertiary field would be used for the production test was not disclosed, although Walker Ridge discoveries St. Malo, Cascade or Jack are three likely candidates, Devon indicated.
One test could be model for other reservoirs
However, results from one production test could be used in modeling the reservoirs of other fields in the vast trend, which extends over 100 miles and is generally located between 29,000 and 31,000 feet, including 6,000 to 7,000 feet of water.
“Because they are seismically analogous that will provide the analog field for all the lower tertiary,” Richels said.
In addition to St. Malo, Cascade and Jack, Chinook, discoveries Great White and Tabago also are situated in the lower tertiary trend. In addition to Devon, lower tertiary players include ChevronTexaco, Shell, BP, Unocal and BHP Billiton.
“We are suggesting to our partners that this would be helpful,” a spokesman for Devon said of the proposed test. “But exactly where we do this has not been decided. All the partners are still deciding the next move.”
St. Malo strongest of discoveries
However, St. Malo is shaping up as perhaps the strongest of the Walker Ridge discoveries that also include Cascade and Jack. The St. Malo discovery well turned up 450 feet of net oil pay, followed by an appraisal well with about 400 feet of net pay.
“Before we drilled this, we thought it had a gross mean potential access of a quarter of a billion barrels and it looks like it’s larger than that,” Richels said.
Devon expects to participate in an appraisal well at Cascade late this year or early next year, which could shed additional light on the massive lower tertiary play.
Devon is now saying that development of oil discoveries in the area could begin as early as 2008, although the company said the partners continue to weigh development options, including the possible use of a floating production system.
Richels said Devon has identified 24 “drilling opportunities” among the 200 blocks or 600,000 acres it owns in the Gulf of Mexico’s lower tertiary trend. In total, Devon owns roughly 1.9 million deepwater acres, making the company the largest holder of deepwater acreage among exploration and production independents operating in the Gulf.
