The deep-gas play in the shallow waters of the Gulf of Mexico shelf is one of the most exciting of recent years. Jim Bob Moffett, co-chairman of New Orleans-based McMoRan Exploration Co., has been a leading force in launching activity in this trend. Moffett recognized the potential of the deep shelf early, and in 1999 and 2000 assembled a large acreage position in the shallow waters. One particular area of interest was a few miles offshore Vermilion Parish, Louisiana. Moffett negotiated a farm-out from ChevronTexaco, and pieced together an 80,000-acre prospect on portions of OCS Lease 310 and Louisiana State Lease 340. The properties he was exploring had produced nearly 6 trillion cubic feet (Tcf) of gas during the past 40 years, from shallow zones at depths of less than 12,500 feet. His target was much deeper, however. Moffett believed that the geology of this particular portion of the deep shelf was more akin to that seen onshore than that of the typical offshore plays. "It was a little bit like state-line geology," he says. "A lot of people that work the offshore have never worked onshore. Fortunately, I've had the opportunity to cross those boundaries." Indeed, Moffett applied a concept that he had been working onshore in the Miocene for years. "There were a number of onshore Miocene discoveries that were deep-seated features that weren't necessarily coincidental with the shallower production." Discouragingly, the bright-spot techniques so beloved by Gulf of Mexico prospectors were not helpful at the depths Moffett was working. "The bright-spot play has been a wonderful technology in the Plio-Pleistocene," he says. "Unfortunately, by the time we get into the Miocene, the density of the rocks works against us." At depths below 15,000 feet, it's more difficult to extract some of the hydrocarbon indicators, and there just haven't been enough wells drilled to calibrate the seismic data. Because the occurrence of hydrocarbons can't be predicted from seismic, the risks are correspondingly higher than in the shallower plays. Undaunted by the high risk and high costs to test its deep prospects, McMoRan entered into a creative drilling program with a subsidiary of El Paso Corp. That firm agreed to drill and pay for the first four exploratory and development wells in the prospect area, in return for the first 100 billion cubic feet of gas equivalent. After this was produced, El Paso and McMoRan would be 50/50 partners. The results? The JB Mountain #1 discovery was drilled in late 2002 to a depth of 22,001 feet in 10 feet of water on South Marsh Island Block 223. On a production test, it flowed 14.25 million cubic feet of gas and 1,056 barrels of condensate per day. The partners followed that success with JB Mountain #2, a 22,375-foot well that tested at a rate of 20.3 million cubic feet of gas and 1,116 barrels of condensate per day. Currently, the #1 and #2 wells are producing 65 million cubic feet of gas equivalent per day. Another offset, JB Mountain, #3 a mile south of the #1, was being drilled at press time. Additionally, some six miles northeast of the JB Mountain prospect, El Paso and McMoRan scored another big discovery. The Mound Point Offset #1, on Louisiana State Lease 340, was drilled to a total depth of 19,000 feet and is currently producing 35 million cubic feet of gas equivalent per day. Some 7,000 feet northwest, the Mound Point Offset #2 well is now being drilled. The strength of the JB Mountain and Mound Point wells is such that the U.S. Minerals Management Service mentioned them by name in its revised estimate of deep-shelf gas. Last November, the MMS increased its resource estimate from 20 to 55 Tcf in the deep-shelf play, defined as occurring at depths of 15,000 feet or greater below the Outer Continental Shelf, in water depths up to 656 feet. "It's still a high-risk play, and the tolerance for risk will limit how many people will stick their nose into this one," says Moffett. "You can't stick your toe into these big prospects. You have to get completely involved in them and get involved in enough of them to give them a chance to work." According to the MMS, gas production from the deep shelf in the Gulf of Mexico has been rising, climbing from 187 billion cubic feet in 1994 to an estimated level of 421 billion in 2002.