Noble Energy reported all three wells at the Galapagos development in the deepwater Gulf of Mexico (GoM) are producing and at rates above the original forecast.
The company also announced that appraisal of the Deep Blue prospect will not continue at this time.
Production in the Galapagos area was initiated from the BP-operated Isabela field in early June, followed by the Noble Energy-operated fields of Santa Cruz and Santiago. The fields were individually flow tested and production increased over the course of several weeks. The company's net production of 13,000 barrels of oil per day and 8 million cu ft (MMcf) of natural gas per day is about 30% greater than previously forecast.
With the addition of Galapagos, Noble Energy's deepwater GoM production has increased to approximately 30,000 barrels of oil equivalent per day, with over 80% oil.
David Stover, the company’s president and COO, said “Galapagos is our second major project to start up in the past eight months and will provide significant production and cash flow growth.”
At the Deep Blue well, although hydrocarbons were found in both the initial exploration well and subsequent sidetrack, the company and its partners decided not to proceed with additional appraisal activities at this time.
The well was originally spud in late 2009 and sidetrack operations were under way when the moratorium was announced. Noble Energy was required to suspend operations, and the rig working at that time was released. After the moratorium was lifted, another rig was certified under new regulatory requirements to finish the sidetrack. The company expects to record $118 million of exploration expense in the 2Q related to the Deep Blue prospect.
The parties must now renegotiate a deal that would transfer Breitburn's Permian reserves to investors including Elliott and WL Ross through their participation in a $775 million rights offering.
Sustained lower oil prices may lead to Permian consolidation, the return of tough times to other shale plays and U.S. E&Ps helping rebalance global inventories.
Egypt expects investments of at least $750 million to $800 million in the first stage of exploration in the 12 concessions, Petroleum Minister Tarek El Molla said during a press conference.