McMoRan Exploration Co. Updates Gulf of Mexico Exploration Activities
December 29 2009 - 11:30AM
Business Wire
McMoRan Exploration Co. (NYSE: MMR) today updated its Gulf of
Mexico exploration activities, including updates on in-progress
wells at the Davy Jones ultra-deep prospect, the Blueberry Hill
offset appraisal well and the Hurricane Deep sidetrack well.
Ultra-deep Exploration Activities
The Davy Jones ultra-deep prospect on South Marsh Island
Block 230 has been drilled to 28,112 feet and has a proposed total
depth of 29,000 feet. The objective of the well is to test Eocene
(Wilcox), Paleocene and possibly the Cretaceous (Tuscaloosa)
sections below the salt weld (i.e. listric fault) on the Shelf of
the Gulf of Mexico. Interim logging operations have indicated the
presence of multiple porous sand intervals in the Yegua/Sparta and
Wilcox sections of the Eocene as determined by paleo data from the
well.
Wireline logs have indicated several hundred feet of sand, some
of which may be hydrocarbon bearing, in the Yegua/Sparta section
that will require further evaluation. Wireline logs have also
obtained gamma ray and neutron/density information in an
approximate interval from 26,900 feet to 28,000 feet which indicate
that the Davy Jones well has encountered multiple Wilcox sands, one
of which could be possibly hydrocarbon bearing based on
interpretations of the available density/neutron information.
Because of current hole conditions McMoRan has been unable to
obtain resistivity data through numerous logging attempts below
26,900 feet; resistivity is a critical measurement that indicates
whether the prospective sand intervals are hydrocarbon or water
bearing. McMoRan is currently conditioning the hole and plans to
drill several hundred additional feet before undertaking further
logging to determine the resistivity of the identified sands in the
Wilcox section.
The data received to date from ultra-deep drilling on the Shelf
at Davy Jones and Blackbeard West (South Timbalier Block 168)
confirm our original geologic modeling, which correlates our
objective sections on the Shelf in the Miocene and older age
sections to those productive sections seen in deepwater discoveries
by other industry participants.
McMoRan’s interpretation indicates that the Cretaceous
(Tuscaloosa) section productive onshore in the Tuscaloosa trend
north of Baton Rouge, LA (i.e. the Port Hudson, Judge Digby,
Moore-Sams fields, etc.) could extend to offshore in deep horizons
on the Shelf, which would support drilling deeper at Davy Jones and
other ultra-deep prospects controlled by McMoRan and its partners.
Future prospective wells include an appraisal well to the southwest
of the initial Davy Jones well which would allow McMoRan to test
similar sections approximately 1,000 feet shallower than in the
initial exploratory well.
McMoRan is one of the largest acreage holders on the Shelf of
the Gulf of Mexico and onshore in the Gulf Coast area with rights
to approximately 1 million gross acres including 150,000 gross
acres associated with the ultra-deep gas play below the salt weld.
McMoRan is currently utilizing the Rowan Mississippi jack-up rig to
drill the Davy Jones ultra-deep well and has an option on Rowan
Ralph Coffman, which is the sister rig to the Rowan Mississippi.
These two rigs would allow McMoRan to maintain an active ultra-deep
drilling program in 2010.
McMoRan operates the Davy Jones prospect, which involves a large
ultra-deep structure encompassing four OCS lease blocks located in
20 feet of water, and will fund 25.7 percent of the exploratory
costs and holds a 32.7 percent working interest and 25.9 percent
net revenue interest. Other working interests owners in Davy Jones
include: Plains Exploration & Production Company (NYSE: PXP)
(27.7%), Energy XXI (NASDAQ: EXXI) (15.8%), Nippon Oil Exploration
USA Limited (12%), and W.A. "Tex" Moncrief, Jr. (8.8%).
Deep Gas Exploration Activities
The Blueberry Hill offset appraisal well on Louisiana
State Lease 340 commenced drilling on November 8, 2009 and is
currently drilling below 14,500 feet towards a proposed total depth
of 21,850 feet. The offset appraisal well is located in 10 feet of
water approximately 2,000 feet southeast of the sidetrack #2 well,
which was drilled to a total depth of 21,942 feet and encountered
45 net feet of pay in October 2009. McMoRan believes the sands seen
to date in the area could thicken in the offset well as they are
expected to be structurally high to the sands in the sidetrack #1,
by-pass and sidetrack #2 wells drilled earlier in 2009. The offset
well is also expected to test deeper potential in the area. McMoRan
owns a 42.9 percent working interest and a 29.7 percent net revenue
interest in the Blueberry Hill well. PXP holds a 47.9 percent
working interest.
The Hurricane Deep sidetrack well on South Marsh Island
Block 217 commenced drilling on November 17, 2009 and is currently
drilling below 13,400 feet towards a proposed total depth of 21,750
feet. The Hurricane Deep sidetrack is located on the southern flank
of the Flatrock structure. This up dip test well is targeting the
significant Gyro sand encountered in the Hurricane Deep well (No.
226) and deeper potential. As previously reported, the No. 226 well
was drilled to a true vertical depth of 20,712 feet in the first
quarter of 2007 and logs indicated an exceptionally thick upper
Gyro sand totaling 900 gross feet, the top 40 feet of which was
hydrocarbon bearing. McMoRan believes an up dip well has the
potential to contain a thicker hydrocarbon column. McMoRan owns a
25.0 percent working interest and 17.7 percent net revenue interest
in the well. PXP holds a 30.0 percent working interest.
A conference call with securities analysts about McMoRan’s
current exploration activities is scheduled for Wednesday, December
30, 2009 at 10:00 a.m. Eastern Time. The conference call will be
broadcast on the Internet. Interested parties may listen to the
conference call live by accessing the webcast on “www.mcmoran.com”.
A replay of the call will be available through Friday, January 15,
2010.
McMoRan Exploration Co. is an independent public company engaged
in the exploration, development and production of oil and natural
gas offshore in the Gulf of Mexico and onshore in the Gulf Coast
area. Additional information about McMoRan is available on its
internet website “www.mcmoran.com”.
CAUTIONARY STATEMENT: This press release contains certain
forward-looking statements regarding various oil and gas
discoveries, oil and gas exploration, development and production
activities, capital expenditures, and anticipated and potential
production and flow rates. Accuracy of these forward-looking
statements depends on assumptions about events that change over
time and is thus susceptible to periodic change based on actual
experience and new developments. McMoRan cautions readers that it
assumes no obligation to update or publicly release any revisions
to the forward-looking statements in this press release and does
not intend to update these statements more frequently than
quarterly. Important factors that might cause future results to
differ from these forward-looking statements include: adverse
conditions such as high temperature and pressure that could lead to
mechanical failures or increased costs; variations in the market
prices of oil and natural gas; drilling results; unanticipated
fluctuations in flow rates of producing wells; oil and natural gas
reserves expectations; the ability to satisfy future cash
obligations and environmental costs; as well as other general
exploration and development risks and hazards. These and other
factors are more fully described in McMoRan’s 2008 Annual Report on
Form 10-K on file with the Securities and Exchange Commission
(SEC), as updated by our subsequent filings with the SEC.
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