Newfield scores large natural gas discovery

At 50-60 bcf it ranks among Newfield’s largest finds in Gulf of Mexico’s deeper zones

Ray Tyson

Petroleum News Houston Correspondent

Newfield Exploration says it has found natural gas that appears to meet pre-drill reserve estimates of 50-60 billion cubic feet, ranking it among the largest discoveries Newfield has made this far in deeper zones of the Gulf of Mexico’s continental shelf.

The West Cameron 77 No.1 well encountered about 120 feet of net gas pay in two zones between 16,800 and 17,600 feet, the company said July 26, adding that well was then deepened to 19,603 feet and encountered an additional zone that appears to have possible pay over a large gross interval.

Steve Campbell, Newfield’s head of investor relations, said the deeper zone would be tested over the next few weeks and that any reserves would be in addition to the pre-drill estimates. “It was a surprise to find it,” he said.

Newfield’s deep-shelf gas discoveries have averaged about 40 billion cubic feet each.

He said Newfield is evaluating development plans for the discovery and expects first production from the field in early 2005. Depending on the depths of the pay sections completed in this well bore, the field would qualify for 15-25 billion cubic feet of royalty relief under rules established by the U.S. Minerals Management Service.

The West Cameron 77 discovery is located about 10 miles offshore Louisiana in about 40 feet of water. Newfield has now drilled 12 successful deep shelf exploration wells out of 19 attempts to date. The Company expects to spud additional deep shelf tests in the remainder of 2004.

Newfield operates the West Cameron 77 discovery with a 45 percent working interest in a joint development area covering portions of West Cameron 77 and West Cameron 96. After payout, Newfield’s interest, subject to a 25 percent back in by Seneca Resources would be 33.75 percent. The remaining interest is owned 30.95 percent by Australia’s BHP Billiton, 13.75 percent by Houston Exploration and 10.3 percent by Ridgewood Energy.