Offshore rig contractor Rowan, which has drilled most of the wells over 18,000 feet on the Gulf of Mexico’s continental shelf, says one of its clients, ExxonMobil, is planning to sink three more “ultra-deep” exploration wells on the shelf, in addition to the closely watched Blackbeard West well.
Blackbeard West, which is headed to 32,000 feet and possibly 38,000 feet, was spud in early February and could take up to a year to complete. Rowan’s high-powered Scooter Yeargain jack-up rig was selected for the job.
“ExxonMobil says they are going to drill four of these wells,” Bill Provine, Rowan’s vice president of investor relations, told analysts at the March 15 A.G. Edwards Energy Conference in Boston, Mass. “Even if the first three wells are dry, they’re still going to drill the fourth well.”
ExxonMobil declined to comment on its drilling plans after Blackbeard West, but did note that the company and its partners have contracted with Rowan for one well only, Blackbeard West. “It would be premature to speculate beyond the drilling of this well,” an ExxonMobil spokesman said.
Rowan expects revenues from the Blackbeard contract to range from $28 million to as much as $35 million, depending upon rig utilization. However, drilling costs could escalate if equipment problems develop down hole.
“They are expecting high pressures and bottom hole temperatures as much as maybe 400 to 600 degrees,” Provine told analysts at the conference.
Additional wells likely at Treasure Island
He indicated that additional ExxonMobil-operated wells likely would be drilled in Newfield Exploration’s Treasure Island project, which includes Blackbeard West, as well as other prospects scattered over a broad area on the shelf known as Treasure Bay, Treasure Chest and Treasure Ship.
“There are quite a few wells that they’re going to drill,” Provine told analysts.
However, after Blackbeard West “there is nothing else firm on the list,” said Steve Campbell, Newfield’s head of investor relations.
ExxonMobil holds a 25 percent stake in Blackbeard, followed by partners Newfield with a 23 percent interest, BP with a 20 percent interest, Brazil’s Petrobras with a 20 percent interest, Dominion Exploration and Production with a 7 percent interest and Australia’s BHP Billiton with a 5 percent stake.
The Gulf’s continental shelf currently produces about 4.5 trillion cubic feet of natural gas per year but has been in decline for years. However, the Blackbeard West structure is said to be so large it could easily house 1 tcf to 5 tcf of reserves.
Shell is believed to be the first major oil company to drill below 25,000 feet on the shelf, an arbitrary line that separates deep from the ultra-deep. The Shark well, drilled to a depth of around 26,000 feet, turned out to be a dry hole.
Several other exploratory wells have been drilled to around the 25,000 foot level on the continental shelf, including the ChevronTexaco-operated Cadillac well on Viosca Knoll Block 251.
BP is currently negotiating to drill a 32,000 to 35,000 foot exploratory well on its Antietam prospect on the continental shelf, Rowan said, adding that Shell also is negotiating to drill a 24,000 to 26,000 foot exploration well on its West Esplanade prospect.
