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Bucks add up for Devon wildcat Troublesome Yorktown wildcat likely to cost partners $65 million Petroleum News Houston Staff
Oklahoma’s Devon Energy is demonstrating just how expensive it can be drilling a naughty wildcat in the deepwater Gulf of Mexico.
The big independent disclosed in a May 8 conference call with analysts that the Devon-operated Yorktown exploratory well in the Central Gulf could end up costing $65 million. That would place it among the most expensive wells ever drilled in the entire gulf.
Yorktown, located in 2,100 feet of water on Mississippi Canyon Block 886, was spud way back in October. The company said it experienced delays due primarily to “a difficult down-hole pressure regime.” Devon said it also decided to install another casing string, adding to delays.
It’s also unlikely that Devon will reach its initial 25,000-foot target, the company said, adding that the well was at the 19,000-foot level and would go another 2,000 to 3,000 feet before operations were completed.
Barring any more problems, it should take “two or three weeks” to complete the Yorktown well, Devon said.
With a few thousand feet to go at Yorktown, Devon already has run up drilling costs amounting to $55 million. If expenses reach $65 million as Devon anticipates, Devon’s share would be $50 million and partner Kerr-McGee’s share would be $15 million. The prospect itself is owned 50/50 by Devon and Kerr-McGee.
However, a big discovery can wipe away a lot of tears, and Devon is sticking to its pre-drill Yorktown estimate of around 200 million barrels of oil equivalent. However, the company has said nothing about what it already has found. Devon plans to drill in eastern gulf Meanwhile, it appears Devon will become the third operator to drill a deepwater exploration well in the relatively unexplored eastern gulf. A small portion of the region, after protests from environmentalists and politicians, was reopened to leasing in late 2001.
Devon told analysts that it plans to sink a well on its East Tuscany prospect this year, probably in the third quarter. Devon’s interest in the prospect rose to 65 percent after its recent acquisition of Houston-based independent Ocean Energy. EOG Resources, another independent, owns the remaining interest.
East Tuscany is considered to be an “ultra-deepwater” prospect, located in roughly 7,000 feet of water on De Soto Canyon blocks 180 and 225. Pre-drill estimates range around 150 million barrels of oil equivalent, Devon said.
So far, there have been two exploration wells drilled within the eastern gulf lease sale boundaries as established by the U.S. Minerals Management Service. The first, Marathon’s Barracuda well on De Soto Block 927, was a dry hole.
Anadarko Petroleum actually has drilled two wells in the area, one a relatively small 40-to 50-million barrel discovery at Jubilee located in Atwater Valley just outside the eastern gulf’s western boundary. The company has released no information on Hawkeye, situated wholly within the eastern gulf on Lloyd Ridge Block 360. The company plans to drill at least one additional well in the eastern gulf this year.
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