THE HAGUE, the Netherlands,
September 28, 2015 /PRNewswire/
--
Shell (NYSE:RDS.A)(NYSE:RDS.B) today provides an update on the
Burger J exploration well, located in Alaska's Chukchi Sea. The Burger J well
is approximately 150 miles from Barrow,
Alaska, in about 150 feet of water. Shell safely
drilled the well to a total depth of 6800 feet this summer in a
basin that demonstrates many of the key attributes of a major
petroleum basin. For an area equivalent to half the size of
the Gulf of Mexico, this basin
remains substantially under-explored.
Shell has found indications of oil and gas in the Burger J well,
but these are not sufficient to warrant further exploration in the
Burger prospect. The well will be sealed and abandoned in
accordance with U.S. regulations.
"The Shell Alaska team has operated safely and exceptionally
well in every aspect of this year's exploration program," said
Marvin Odum, Director, Shell
Upstream Americas. "Shell continues to see important
exploration potential in the basin, and the area is likely to
ultimately be of strategic importance to Alaska and the US. However, this is a clearly
disappointing exploration outcome for this part of the basin."
Shell will now cease further exploration activity in offshore
Alaska for the foreseeable future.
This decision reflects both the Burger J well result, the high
costs associated with the project, and the challenging and
unpredictable federal regulatory environment in offshore
Alaska.
The company expects to take financial charges as a result of
this announcement. The balance sheet carrying value of Shell's
Alaska position is approximately
$3.0 billion, with approximately a
further $1.1 billion of future
contractual commitments. An update will be provided with the third
quarter 2015 results.
Shell holds a 100% working interest in 275 Outer Continental
Shelf blocks in the Chukchi Sea.
Operations will continue to safely de-mobilize people and
equipment from the Chukchi Sea.
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SOURCE Royal Dutch Shell plc