Prospect could be tied to BP’s giant Thunder Horse discovery

Owners of the Thunder Hawk prospect, located next door to the largest deepwater oil discovery in the Gulf of Mexico, are hoping to drill their first exploratory well on the block during the first quarter of 2004.

“It still appears to be on track for that,” said Roger Jarvis, chief executive officer of 25 percent Thunder Hawk owner Spinnaker Exploration. He said the exploration well would be operated by 37.5 percent owner Dominion E&P. Murphy Oil also holds a 37.5 percent stake in the prospect.

Located on Mississippi Canyon Block 734, Thunder Hawk is situated just north of the estimated 1 billion barrel Thunder Horse field operated by 75 percent owner BP. Seismic data and other information indicate Thunder Hawk is geologically linked to Thunder Horse and likely shares the same inside oil-water contact, Jarvis said.

Thunder Hawk owners believe their piece of the Thunder Horse play holds around 400 million barrels of recoverable oil equivalent. Thunder Hawk is considered low risk because of its close proximity to a proven discovery and because pipelines and other infrastructure being installed by BP and Thunder Horse partner ExxonMobil (25 percent) possibly could be available to any production coming from Thunder Hawk.

Thunder Horse, located 125 miles southeast of New Orleans at 6,000-foot water depths in the Boarshead basin, is scheduled to come on stream in 2005 and peak at about 290,000 barrels of oil equivalent per day. The owners are installing an elaborate $1 billion pipeline system that will transport oil and gas from Thunder Horse and other deepwater Gulf discoveries.

Thunder Hawk partners Dominion, Spinnaker and Murphy acquired Mississippi Canyon Block 734 in the 2000 Central Gulf of Mexico Lease Sale 175 on an uncontested bid of $2.1 million, which Jarvis said surprised him because of the block's location and potential. Surprisingly, Thunder Horse partners BP and ExxonMobil passed on the block. Instead, ExxonMobil alone chose to spend $57 million for three blocks situated well north of Thunder Horse. “I think we picked up a real bargain here,” Jarvis said.

Most of the leases within a 15-mile radius of Thunder Horse have been scooped up by various companies over the last three years, demonstrating Thunder Horse's strong attraction. Other players in the region include Shell, ChevronTexaco, ConocoPhillips, Marathon Oil, Anadarko Petroleum and Noble. The Dominion-Spinnaker-Murphy Thunder Hawk prospect specifically adjoins Mississippi Canyon Block 778 on the northeast side of the eight-block Thunder Horse complex.

The Thunder Horse complex actually contains an official 1.5 billion barrel in recoverable reserves when including a separate BP-ExxonMobil discovery called Thunder Horse North. However, some analysts speculate that the Thunder Horse play could be much larger, containing perhaps 5 billion barrels with a potential of up to 7 billion barrels.