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Anadarko kicks off Eastern Gulf program with Jubilee discovery
Petroleum News Houston Staff
Exploration and production independent Anadarko Petroleum, on its first shot in the remote Eastern Gulf of Mexico, turned up a small natural gas discovery the company believes could lead to additional finds down the road.
The Jubilee wildcat, drilled in 8,800 feet of water, located “productive sands exactly as predicted,” validating both the company's geologic model and seismic imaging technology, Anadarko CEO Robert Allison said April 7.
Moreover, Jubilee found one of the “primary prospective intervals” the company believes exists in all of its Eastern Gulf prospects, he said.
Anadarko said it has identified 17 prospects on its 38-block position in the Eastern Gulf, adding that its leasehold holds estimated potential reserves of 2 billion barrels of oil equivalent.
Reserves of 40-50 million boe Jubilee encountered a total of 83 feet in net pay, leading Anadarko to estimate reserves of 40-to 50 million barrels of oil equivalent. That is likely too little to economically justify a stand-alone facility, given Jubilee's extreme water depth and remote location about 200 miles southeast of New Orleans, La.
However, Anadarko indicated that Jubilee could be wrapped into any future discoveries using so-called hub facilities. A similar approach was used on the Canyon Express project about 75 miles north of Jubilee, where three fields — Camden Hills, Aconcagua and King's Peak — were tied into a single gas pipeline with 500,000 million cubic feet of capacity.
“We have the prospects and the expertise to drill these deepwater wells and achieve excellent economics,” Allison asserted. Hawkeye next Anadarko said its next Eastern Gulf target would be the “high-potential” Hawkeye prospect, located about 20 miles east of Jubilee. Drilling was to begin the week of April 6, the company said.
Hawkeye, located in 9,100 feet of water on Lloyd Ridge Block 360, would be the second exploration well actually drilled within Eastern Gulf boundaries since the region was re-opened to oil and gas leasing in late 2001.
The first well to be drilled within the Eastern Gulf Sale 181 area, Marathon Oil Corp.'s Barracuda prospect on DeSoto Block 927, was a dry hole. Anadarko and Shell Offshore dominated that sale, accounting for 72 percent or $245.6 million of $340.5 million in high bids. The winnings included Anadarko's sale-high bid of $26 million for Lloyd Ridge Block 91.
Anadarko said it has committed to a third slot on Transocean's Deepwater Millennium drillship for a possible delineation well or to drill another wildcat in the area. Lloyd Ridge prospects Atlas and Mondo could be targets after Hawkeye, the company has indicated. Company plans 40 wells in Gulf of Mexico The Jubilee well, on Atwater Valley Block 349, is technically situated on the eastern edge of the Central Gulf, although the prospect extends into the Eastern Gulf. In fact, 15 of 38 blocks that make up Anadarko's Eastern Gulf program are located in the Central Gulf near the border. All 38 blocks are 100 percent owned by Anadarko.
“We've assembled a strong acreage position in the Gulf, we've completed extensive technical analysis, and we're excited to put our drilling program into action,” Allison said.
It cost Anadarko $15 million to drill Jubilee, well below the pre-drill estimate of $19.3 million, the company said, adding that it took less than 30 days to reach a total depth of 18,310 feet.
This year Anadarko said it plans to drill 40 wells in the Gulf of Mexico, 10 of which would be exploration wells. The company holds 374 leases in the Gulf with 165 located in deep water. It also holds options to earn working interests in an additional 122 blocks.
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