Kerr-McGee went head-to-head with Hurricane Ivan in the Gulf of Mexico and managed to survive with little more than a bloody nose and some lost production.
The hurricane’s center passed directly over Kerr-McGee’s deepwater Neptune production spar the night of Sept. 15, battering the facility with sustained winds of 135 miles-per-hour and ocean waves reportedly in excess of 70 feet.
“From our initial inspection the structural integrity of this facility appears to be intact,” Rick Buterbaugh, Kerr-McGee’s vice president of investor relations, said in a Sept. 22 conference call with investors. “This is a testament to the sound engineering design of this facility.”
He said the Neptune facility, installed in 1997 as the world’s first production spar, sustained only “superficial damage” to such things as stairways, electrical trays and living quarters. The facility is on Viosca Knoll Block 826 about 90 miles south of Mobile, Ala.
“We are in the process of repairing this damage, which is currently estimated to take about four to six weeks before production can resume,” he added. Kerr-McGee operates Neptune with 50 percent working interest.
Kerr-McGee is still assessing damage to its non-operated Pompano facility on Viosca Knoll Block 989, which is expected to remain shut in until the end of September, Buterbaugh said.
On the Gulf of Mexico’s outer continental shelf, Kerr-McGee processing facilities at Main Pass and Breton Sound also sustained minor damage with production expected to be fully restored within a few weeks.
Company shut in 23 platforms ahead of Ivan
In total, 23 Kerr-McGee platforms were shut in ahead of Ivan, resulting in an estimated 2004 third-quarter production loss to Kerr-McGee of 450,000 to 500,000 barrels of oil equivalent, Buterbaugh said, adding that about 20,000 barrels per day net to the company remained shut in on Sept. 22.
Despite all the disruptions due to Ivan, Kerr-McGee is sticking with its previous overall production forecast averaging about 310,000 barrels per day of oil equivalent for 2004. However, the company said Gulf of Mexico volumes likely would come in at the lower end of previous guidance of 53,000-58,000 barrels of oil per day and 372-395 million cubic feet of gas per day.
Ivan also caused a “temporary interruption” in drilling activities at Kerr-McGee’s Ticonderoga and Gunnison fields, as well as at the company’s Dawson Creek prospect, Buterbaugh said. He said activities at the company’s Nile prospect would resume once repairs are completed on the Ocean Star drilling rig, which broke from its moorings during the storm.
Ivan also has caused about a week’s delay in Kerr-McGee’s “high-potential” exploration program involving five wells to be drilled during the 2004 fourth quarter in deepwater Gulf of Mexico, Buterbaugh said.
He said the five prospects — Essex, Kung Pao, Fawkes, Chilkoot and West Raptor — could hold combined resources ranging from 210 million to 700 million barrels of oil equivalent.
