The Blackbeard West exploration well on the Gulf of Mexico’s continental shelf, perhaps the most closely watched well in the world because of its planned depth, is said to have reached the 13,000-foot level where the bore hole is being widened before heading to 32,000 feet and possibly to 38,000 feet in search of a giant natural gas field.
Meanwhile, exploration and production independent Newfield Exploration, a major stakeholder in Treasure Island leases that include the Blackbeard prospect, is discussing with third parties the possibility of drilling more “ultra-deep” wildcat wells on prospects located near Blackbeard, said David Trice, Newfield’s chief executive officer.
“We’re in discussions with those parties now trying to work out an agreement on the equity (to be) owned in those prospects, which would put us in a position to go market those prospects,” Trice said May 25 at the UBS Oil & Gas Conference in Austin, Texas.
Trice did not name the parties involved in the current discussions. However, his comments at the UBS conference at least partially confirmed earlier statements made by Rowan, the contractor hired to drill Blackbeard.
Bill Provine, Rowan’s vice president of investor relations, told industry analysts in March at the A.G. Edwards Energy Conference in Boston that Blackbeard West operator ExxonMobil wanted to drill four more wells at Treasure Island, even if Blackbeard came up dry.
Several candidates for future ‘ultra-deep’ wells, said Trice
Newfield’s Trice told participants at the UBS conference that there were several candidates for future “ultra-deep” wells at Treasure Island, including the nearby Blackbeard East prospect.
However, he said companies that may be interested in participating in future ultra-deep drilling on the continental shelf are waiting on the sidelines until drilling results from Blackbeard West are released.
“The industry basically is like a bunch of birds on a wire watching the Blackbeard well go down,” Trice said. “I think people want to see how long does it take, how much does it cost, and did you find anything.”
Despite industry concerns, “we will have a marketing effort that we’ll undertake reasonably soon,” he added.
Trice noted that Australia’s BHP Billiton, another Newfield partner, is committed to drill an ultra-deep well on a nearby Treasure Bay lease, probably in 2006.
In addition to Newfield, BHP and ExxonMobil, companies involved in either Treasure Island or Treasure Bay prospects include British Petroleum, Brazil’s Petrobras and U.S.-based Dominion Exploration and Production. In fact, Petrobras also is committed to drill an ultra-deep well that carries both Newfield and BHP as partners, Trice said.
Well could take up to a year to complete
Blackbeard West, on South Timbalier block 168, was spud in early February and could take up to a year or more to complete. If successful, it would be the deepest exploration well ever drilled on the Gulf’s continental shelf.
“Blackbeard will be a well that doesn’t get down … before 2006,” he said. “We have a long, long way to go.”
Rowan expects drilling revenues from the Blackbeard contract to range from $28 million to as much as $35 million, depending upon rig time. However, drilling costs could escalate far beyond $35 million should equipment problems develop down hole where pressures and temperatures below 25,000 feet are expected to be extreme. Bottom hole temperatures alone could range from 400 to 600 degrees.
Houston-based Newfield is involved in two of the three ultra-deep wells currently being drilled on the Gulf’s continental shelf. In addition to its 23 percent overriding interest in Blackbeard West, the company holds a 10 percent take in the Chevron-operated Cadillac well on Viosca Knoll block 251.
Trice said Cadillac, with a target depth of 25,000 feet, could hold from 300 billion to 500 billion cubic feet of gas reserves, up from earlier estimates. “It’s a sizeable prospect and with that goes high risk,” he said.
The third ultra-deep exploration well currently being drilled on the continental shelf is the Shell-operated Joseph wildcat, also targeted for around 25,000 feet.
“There actually have been some encouraging rumors about that well,” Trice said, adding that Newfield has “some very interesting prospects” in the area of Joseph, including the one to be drilled by partner Petrobras.
