McMoRan starts Blackbeard East ultradeep redrill

By OGJ editors
HOUSTON, July 19
-- McMoRan Exploration Co., New Orleans, said it began this month redrilling a bypass of the Blackbeard East ultradeep exploratory well at 30,700 ft to evaluate targets in the Eocene in the Gulf of Mexico.

The well, in 80 ft of water on South Timbalier Block 144, is permitted to 34,000 ft. Based on interpretations of drilling data obtained in this year’s first quarter prior to a mechanical issue, McMoRan believes the well encountered Sparta sands in the Eocene that are younger than the Wilcox. Sparta sands are productive onshore in South Louisiana. Wireline logs will be required to evaluate this interval.

As reported in January, wireline logs indicated that Blackbeard East encountered hydrocarbon-bearing sands in the Oligocene Frio with good porosity below 30,000 ft. McMoRan is considering downdip drilling opportunities on the flanks of the structure to evaluate this section further. This is the first hydrocarbon-bearing Frio sand encountered either on the gulf shelf or in the deep water off Louisiana.

The Frio sand section below 30,000 ft is in addition to the 178 net ft of hydrocarbons in the Miocene sands above 25,000 ft announced in December 2010 at Blackbeard East. Pressure and temperature data below the salt weld between 19,500 ft and 24,600 ft at Blackbeard East indicate that a completion at these depths could utilize conventional equipment and technologies, McMoRan said.

McMoRan holds a 70% working interest and a 56.2% net revenue interest in the well. Other working interest owners include Energy XXI 18%, Moncrief Offshore LLC 10%, and a private investor 2%. McMoRan’s investment in Blackbeard East, which includes allocated costs associated with the PXP property acquisition, totaled $216.1 million at June 30.

The Lafitte ultradeep exploratory well is drilling below 24,200 ft towards a proposed total depth of 29,950 ft in 140 ft of water on Eugene Island Block 223. The well targets Miocene objectives and possibly Oligocene Frio sections below the salt weld.

McMoRan has a 72% working interest and 58.3% net revenue interest in Lafitte. Other working interest owners in Lafitte include Energy XXI 18% and Moncrief Offshore 10%. McMoRan’s investment in Lafitte, which includes allocated costs associated with the PXP property acquisition, totaled $100.2 million at June 30.

Information gained from the Blackbeard East and Lafitte wells is expected to assist McMoRan in developing plans for future operations at Blackbeard West.

As previously reported, the Blackbeard West ultradeep exploratory well on South Timbalier Block 168 was drilled to 32,997 ft in 2008. Logs indicated four potential hydrocarbon-bearing zones that require further evaluation, and the well was temporarily abandoned. McMoRan is evaluating whether to drill deeper at Blackbeard West, drill an offset location, or complete the well to test the existing zones.

McMoRan also has identified a location in the Blackbeard West unit on Ship Shoal Block 188 to evaluate the Miocene-age sands seen in Blackbeard East above 25,000 ft. McMoRan is developing plans to commence drilling this ultradeep well, which has a proposed total depth of 26,000 ft, in this year’s second half.

The Ship Shoal Block 188 location lies 4 miles west of the Blackbeard West-1 well on South Timbalier Block 168. McMoRan holds a 67.3% working interest and 51.5% net revenue interest in the Blackbeard West well on Ship Shoal Block 188. McMoRan’s total investment in Blackbeard West, which includes allocated costs associated with the PXP property acquisition, totaled $58.9 million at June 30.

In addition to the ultradeep play on the shelf, McMoRan’s exploration strategy is focused on the deep gas play with prospects that target large Miocene age deposits above the salt weld or listric fault at depths typically between 15,000 ft and 25,000 ft.

The Boudin deep gas exploration well was spud Feb. 27, and is drilling below 19,350 ft. Boudin, in 20 ft of water on Eugene Island Block 26, has a proposed total depth of 23,100 ft and will test Miocene objectives. McMoRan holds a 53.5% working interest and a 42.4% net revenue interest in Boudin. Energy XXI has a 20.6% working interest. McMoRan’s total investment in Boudin, which includes allocated costs associated with the PXP property acquisition, totaled $49.1 million at June 30.

The Hurricane Deep well, in 12 ft of water on South Marsh Island Block 217, was drilled to a true vertical depth of 21,378 ft in July. Log results indicated the presence of Operc and Gyro sands that McMoRan determined could be pursued in an updip location. The well is being temporarily abandoned to preserve the wellbore, and McMoRan is evaluating opportunities to sidetrack or deepen.

McMoRan’s total investment in Hurricane Deep, which includes allocated costs associated with the PXP property acquisition, totaled $54.5 million at June 30. McMoRan’s investment is expected to be reduced by $11 million for reimbursable costs associated with its insurance programs.

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