Infrastructure-led exploration (ILX) continues to lead to rewards in the U.S. Gulf of Mexico (GoM) with the latest win made by W&T Offshore Inc. and partner Kosmos Energy Ltd.

Dallas-based Kosmos Energy, which entered the U.S. GoM last year with its acquisition of Deep Gulf Energy Cos., said June 4 the Gladden Deep well struck oil. Drilled by operator W&T Offshore, the deepwater well is located in Mississippi Canyon 800 in more than 3,000 ft of water.

Recoverable resources are expected to be about 7 million barrels of oil equivalents (MMboe).

“Although Gladden Deep is the smallest prospect in this year’s drilling campaign, it is a prime example of our ILX strategy in action—targeting high margin, high return barrels that can be quickly brought online through existing facilities,” Kosmos Energy CEO Andy Inglis said in a statement. “The development of Gladden Deep has a full cycle rate of return of over 100% at $60/bbl Brent.”

Offshore players have been adding value by targeting near-field discoveries, or ILX. The U.S. GoM is a proven basin with mature and emerging play types. Its plentiful infrastructure has made the basin a mainstay among offshore oil and gas companies. Existing pipeline and platforms have made subsea tieback opportunities the preferred method of development when keeping costs in check and staying on schedule are priorities.

Kosmos is perhaps best known for its basin-opening Jubilee discovery offshore Ghana and Tortue discovery offshore Mauritania and Senegal. But Kosmos’ vice president of geoscience, John Shinol, also spoke about how ILX and strategic acquisitions have opened the next chapter for the company during a recent conference in Houston.

Although Kosmos has evolved through the years, “at the core of our DNA, Kosmos is still very much an exploration company,” Shinol said. But the company has added ILX to its growth strategy, leveraging infrastructure and working with partners.

“It’s going into these areas where discoveries were made in the last several decades and those are already online,” he said explaining the ILX concept. “We’re now going in and looking for the smaller opportunities that either were too small initially to drill for, too risky or folks didn’t even see them.”

With nearby infrastructure and knowledge, the company can get attractive returns from discoveries in the area and short timelines from discovery to first oil, he added.

Plans are for Gladden Deep to be tied back to the Medusa spar and brought online in fourth-quarter 2019.

The well is the first of a four-well ILX program in the U.S. GoM this year. Next up is the Moneypenny prospect, which Kosmos said it will drill in the third quarter. The Oldfield and Resolution prospects will be drilled in the fourth quarter. With the three prospects, Kosmos is targeting combined resources of about 100 MMboe (net to the company).

Meanwhile, longtime GoM producer W&T continues to pursue opportunities in the GoM, having identified about 50 near-term prospects. As of May 25, the company was running four rigs in the GoM. Activity was underway in the SS 349/359 (Mahogany Field), where additional T-Sand drilling is planned for this year; EW910 Field, where production is expected in second-quarter; VK823 (Virgo); and several recompletions in the Main Pass area, according to the company’s latest update.

“Existing structure provide a key advantage when evaluating/developing prospect opportunities,” W&T said in the update. “Economic advantage reduces capital expenditures, increases returns by generating cash flow quicker, marketing contracts already in place and provides revenue upside in potential production-handling agreements.”

The company said it owns infrastructure with an estimated replacement value of about $570 million.

Velda Addison can be reached at