McMoRan Exploration Co. (NYSE: MMR) today updated its Gulf of
Mexico exploration and production activities, including results
from the Ammazzo exploratory well, drilling at the Cordage and
Blueberry Hill deep gas prospects, plans for the Davy Jones and the
Blackbeard West ultra-deep prospects and a status report on the
Flatrock Field.
The Ammazzo deep gas exploratory prospect on South Marsh
Island Block 251 commenced drilling on November 22, 2008 and was
drilled to measured depth of 25,488 feet (25,431 feet true vertical
depth) in May 2009. The well encountered a significant sand section
with high quality reservoir rock below 24,500 feet, which was
determined to be wet. While the well was evaluated to be
nonproductive, the important geological information gained from the
well continues to support McMoRan's belief that there are large,
deep structures with the potential to contain significant
hydrocarbon reserves available on the Shelf. The Ammazzo well will
be temporarily abandoned as future plans are considered.
McMoRan�s second-quarter 2009 exploration expense will include
approximately $23 million for drilling and related costs associated
with the Ammazzo well. McMoRan�s partners in the well included
Plains Exploration & Production Company (NYSE: PXP) and Energy
XXI (NASDAQ: EXXI).
James R. Moffett, Co-Chairman of McMoRan, said, �Our Flatrock
discovery confirmed the presence of sands with high permeability
and porosity below 15,000 feet and the results from the Ammazzo
well indicate sands with high porosity, similar to the porosity
present in large deepwater discoveries, also exist at 24,500
feet. The data from these wells, together with information
from the Blackbeard West well and McMoRan�s extensive 3-D database,
are allowing us to correlate the depositional trends from the
onshore and the deepwater, which will enable us to continue to
pursue a major new exploration frontier on the Shelf of the Gulf of
Mexico.�
EXPLORATION ACTIVITIES
The Cordage deep gas exploratory prospect commenced
drilling on March 18, 2009 and is drilling below 17,400 feet
towards a proposed total depth of 19,500 feet. The Cordage
prospect, which is located in 50 feet of water on West Cameron
Block 207, is targeting Rob-L and Rob-M (Operc) sands in the Middle
Miocene. McMoRan owns a 38.0 percent working interest and a 30.5
percent net revenue interest in the well. Mariner Energy, Inc.
(NYSE: ME) is the operator of the well and holds a 50 percent
working interest. Upon completion of operations at Cordage, the rig
will be moved to the Sherwood prospect on High Island Block
133 to commence exploration drilling activities. McMoRan owns a
29.3 percent working interest and a 23.5 percent net revenue
interest in the Sherwood prospect.
On March 29, 2009, McMoRan re-entered a previously existing well
bore and commenced sidetracking operations at the Blueberry
Hill deep gas prospect located on Louisiana State Lease 340 in
10 feet of water. The well is currently drilling below 14,700 feet
with a proposed total depth of 24,000 feet. As previously reported,
in February 2005 McMoRan encountered four hydrocarbon bearing sands
in the Gyro section below 22,200 feet in the original Blueberry
Hill exploratory well. Completion efforts in 2007 were unsuccessful
because of blockage above the perforated intervals. The sidetrack
currently in-progress is targeting the same Gyro sands, which
McMoRan believes could be better developed in a down dip position
on the flank of the structure. McMoRan owns a 42.9 percent working
interest and a 29.7 percent net revenue interest in the well.
McMoRan is currently conducting a feasibility assessment to
determine the practicality of re-entering a previously abandoned
well bore to evaluate the Davy Jones ultra-deep prospect.
Davy Jones is a very large ultra-deep structure located in 20 feet
of water, northwest of Ammazzo. This exploratory well, which
McMoRan will operate, has a proposed total depth of 28,000 feet and
will test the Eocene and Paleocene (Wilcox) sections.
In May 2009, the Minerals Management Service granted McMoRan�s
request for a geophysical Suspension of Operations (SOO) to extend
our leases in the Blackbeard area, including South Timbalier
Block 168. The SOO will provide time for seismic re-processing,
which will provide a clearer picture of the deep structure, and
allow us to evaluate whether to drill deeper at Blackbeard West,
drill an offset location or complete the well to test the existing
zones.
FLATROCK FIELD UPDATE
Following the Flatrock discovery in OCS 310 on South
Marsh Island Block 212 in July 2007, McMoRan has drilled five
additional successful wells in the field. Four wells have commenced
production and gross production from the field averaged
approximately 220 MMcfe/d (41 MMcfe/d net to McMoRan) in the first
quarter of 2009. Production from these wells is currently
temporarily shut in for previously reported planned facility
expansion, maintenance and remediation activities.
First production from the Flatrock Nos. 5 and 6 wells is
expected by mid-year 2009. In April 2009, a successful production
test was performed on the Flatrock No. 6 well. The production test,
which was performed in the Rob-L section, indicated a gross flow
rate of approximately 22 million cubic feet of natural gas per day
(MMcf/d) and 485 barrels of condensate, approximately 4.5 MMcfe/d
net to McMoRan, on a 16/64th choke with flowing tubing pressure of
10,680 pounds per square inch. The operator believes this well is
capable of producing at a gross rate of 50 � 60 MMcfe/d. Following
these activities, McMoRan expects the gross production rate from
the six wells in the field to approximate 335 MMcfe/d, 63 MMcfe/d
net to McMoRan.
McMoRan is evaluating a sidetrack of the Hurricane Deep
well on the southern flank of the Flatrock structure to test the
significant Gyro sand encountered in the Hurricane Deep well on
South Marsh Island Block 217. As previously reported, the Hurricane
Deep exploratory 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 controls approximately 150,000 gross acres in the Tiger
Shoal/Mound Point area (OCS 310/Louisiana State Lease 340) and has
multiple additional exploration opportunities with significant
potential on this large acreage position. McMoRan has a 25.0
percent working interest and an 18.8 percent net revenue interest
in Flatrock. PXP holds a 30.0 percent working interest.
A conference call with securities
analysts about McMoRan�s current exploration and development
activities is scheduled for Thursday, May 28, 2009 at 1:30 p.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, July 3, 2009.
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, 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, except to the
extent required by applicable law, does not intend to update or
otherwise revise 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).
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