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Kerr-McGee hikes reserves for three Gulf deepwater areas Neptune upgrade largest, at 40%, based on development drilling, satellite fields Ray Tyson Petroleum News Houston Correspondent
Exploration and production independent Kerr-McGee has increased oil and gas reserve estimates significantly for its producing Neptune, Nansen and Boomvang field complexes in the deepwater Gulf of Mexico.
All three deepwater areas also have exceeded company expectations in terms of field performance, Kerr-McGee said in a June 23 conference call. The company attributed that partly to operational efficiencies gained through offshore truss and spar platform technologies pioneered by Kerr-McGee in the U.S. Gulf.
The most notable reserve upgrade came at Neptune at Viosca Knoll, where the company said it now expects to produce more than 85 million barrels of oil equivalent during the life of the project, up about 40 percent from initial projections of 60 million barrels of proven and probable reserves, when the project was sanctioned in 1994.
The decision to increase recoverable reserves at Neptune was based on results from the first two phases of development drilling, the addition of wells on Viosca Knoll block 825, production performance and, most recently, satellite fields on Viosca Knoll block 869, Kerr- McGee said. Production began at Neptune in 1997 Neptune came on stream in March 1997 from the world’s first production spar on Viosca Knoll block 826 in 1,050 feet of water. Its field and satellites have now produced a total of 46 million barrels of oil and 65 billion cubic feet of natural gas, totaling 56 million barrels of oil equivalent.
Production from the Neptune spar is currently averaging 11,000 barrels of oil per day and 50 million cubic feet of natural gas per day. Production is derived from 11 dry tree wells on the spar and four subsea wells.
“We also continue to have satellite development opportunities around the field,” said Rick Buterbaugh, Kerr-McGee’s head of investor relations.
The company plans to spud the Viosca Knoll 869 No. 2 well, another potential subsea development well, to the Neptune spar in this year’s third quarter, he added. Nansen sanctioned in June 2000 The Nansen field project at East Breaks was sanctioned in June 2000 on a gross proven reserve base of 55 million barrels of oil equivalent, plus a probable resource base of about 120 million barrels of oil equivalent.
Buterbaugh said that following development drilling, the addition of its Navajo satellites and better than anticipated production performance, the company is now expecting to produce more than 200 million barrels of oil equivalent of gross proven and probable reserves from the area.
Nansen came on line in January 2002 and is the world’s first truss spar, on East Breaks block 602 in 3,700 feet of water. Kerr- McGee operates the field and the Nansen area with a 50 percent working interest.
The Nansen field and its Navajo satellites have now produced 22 million barrels of oil and 135 billion cubic feet of natural gas, totaling 45 million barrels of equivalent, the company said. Production through the spar is averaging about 30,000 barrels of oil per day and about 165 million cubic feet of natural gas per day.
Nansen production is derived from nine dry tree wells on the spar and six subsea wells, of which three produce the Nansen field and three produce the Navajo satellites.
Upcoming activities in the Nansen field include planned recompletions of several of the dry tree wells and one of the Navajo subsea wells.
“Additional satellite drilling is under evaluation as far as capacity and field operations allow,” Buterbaugh said. Boomvang production began in June 2002 Kerr-McGee said it now expects its Boomvang field at East Breaks to produce nearly 80 million barrels of oil equivalent, up from original proven and probable reserve estimates of about 70 million barrels of equivalent.
Boomvang began producing in June of 2002 from a truss spar on East Breaks block 643 in 3,650 feet of water. The truss spar produces the North Boomvang field with five dry tree wells, the East Boomvang field with three subsea wells and the West Boomvang field with one subsea well. Kerr-McGee operates the area and holds a 30 percent interest in most of the wells.
The Boomvang area has produced more than 18 million barrels of oil and more than 100 billion cubic feet of natural gas, totaling about 35 million barrels of oil equivalent since inception. The current production rate is about 30,000 barrels of oil per day and 98 million cubic feet per day of natural gas.
However, Boomvang has not been without its troubles. Recently the East Breaks block 688 No. 8 subsea well experienced a failure of a subsea safety valve, the company said, adding that the well would remain shut in to comply with its own environmental policy until the valve can be repaired, which is expected in early July.
Gas production from the failed well is expected to be restored at 35 million cubic feet per day when the valve is repaired, Kerr-McGee said.
Reservoir performance on a well by well basis at Boomvang has met expectations except for the West Boomvang area where early water breakthrough on the East Breaks 642 No. 1 well and 686 No. 2 well has occurred, Kerr-McGee said.
The 642 No. 1 well was sidetracked updip and the well’s production has been re-established at 20 million cubic feet of gas per day, the company said, adding that remedial work on the 686 No. 2 well “is not justified at this time.”
Future plans for the Boomvang area include a recompletion of one of the East Boomvang wells, subsea tiebacks of two additional satellite wells in East Breaks blocks 598 and 599 north of the platform during the third quarter, as well as the evaluation of further satellite opportunities in the 2004-2005 timeframe, as space and capacity become available, the company said.
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