Noble Energy has added to its winning streak in the deepwater Gulf of Mexico (GoM), having this week deemed its Katmai prospect in Green Canyon as a commercial discovery.
“Drilling operations so far have resulted in over 115 ft [35 m] of oil pay encountered in secondary targets that are above the primary pay zone. Reservoir qualities in these middle Miocene sands are excellent,” Noble CEO Chuck Davidson said during a conference call on the company’s second-quarter results. “Although we have further drilling and evaluation ahead of us, we’ve already got a commercial discovery. … The question now is ultimately ‘How big will this discovery become?’”
Plans call for an extensive logging program before reaching the primary lower Miocene target at a total depth of more than 8,534 m (28,000 ft) within the next few weeks. Final well results could arrive by the end of August.
The find, which will add to the company’s GoM presence that includes at least four other discoveries, eight producing assets and additional prospects, was among the second-quarter bright spots for Noble, which saw its net income fall to $192 million from $377 million in second-quarter 2013.
Record production volumes, however, were reached in onshore shale plays, while second-quarter 2014 was called “very active” for the deepwater GoM where production reached about 19,000 boe/d mostly from the Galapagos, Swordfish and Ticonderoga fields. And if all goes as planned, future quarters could see even more activity.
“We’re making good progress advancing our next round of major projects where we expect a ramp-up of production to commence from just over a year from now,” added David Stover, the company’s COO. “The first to come online will be the Big Bend project in our Rio Grande discovery area, which remains on schedule for first production in late 2015.”
The area also includes the Dantzler development, where Noble is currently drilling an extension well with results expected next year. The development’s close proximity to Big Bend, discovered in 2012, will allow it to benefit from shared production infrastructure, Stover said, adding that long-lead items have been ordered for both fields and subsea installation contracts are being finalized. First production for Big Bend is expected in late 2015, while Dantzler production is on target for first-quarter 2016.
“Following the Rio Grande development, we anticipate having our Gunflint Field on production as planned in the middle part of 2016,” Stover continued. “So the projects teams are quite busy with three new fields to commence production all within a year of each other, adding an incremental 20,000 to 25,000 barrels of oil per day to our production volumes by mid-2016.”
Noble raised its stakes in the GoM when it acquired interest in 17 of BP’s deepwater exploration leases. All of the leases are within the Atwater Valley area, which contains the Bright prospect. Drilling at Bright, which is currently underway, is targeting upper Miocene reservoirs with a potential resource range of 90 MMboe to 350 MMboe. Results are expected by the end of third-quarter 2014.
“With an initial success at Katmai and the Bright well scheduled to reach total depth this quarter, the exploration program has positioned us with good opportunities for new resource discovery and continued long-term growth,” Davidson added. “Katmai represents the latest of a significant string of new field discoveries in the deepwater gulf for Noble Energy.
“It certainly appears to be headed into the development queue along with Gunflint, Big Bend and Dantzler and will certainly solidify plans for deepwater Gulf of Mexico production to more than double in the course of the next several years,” he said.
Other second-quarter E&P highlights as reported by Noble included:
- Delivering a record 112,000 boe/d horizontal production from the Denver-Julesburg Basin and Marcellus shale plays, up 56% from second-quarter 2013;
- Increasing wet gas type curves 10% for wells in the Majorsville area of the Marcellus Shale play;
- Reaching production milestones at the Aseng and Alen fields in West Africa; and
- Increasing the Leviathan resource estimate by 16% to 623 Bcm (22 Tcf) equivalent.
“We continued to make great progress on numerous fronts during the second quarter and find ourselves well-positioned to accelerate our growth profile in the second half of 2014 and into 2015,” Davidson said in a prepared statement. “I am excited about the progress we are making and our outlook for the coming months and years."
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