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Lower Tertiary Yields Another Big Discovery, Says Chevron

Chevron Corp. and its partners have encountered more oil and natural gas reserves in the Lower Tertiary Trend of the Gulf of Mexico (GOM), the oil major's second major discovery in the estimable deepwater formation in less than a year.

The Green Canyon Block 807 No. 2 well encountered pay in "multiple" Lower Tertiary Wilcox Sands, according to Chevron. The well, spud in August, is about 140 miles offshore Louisiana in 5,183 feet (1,580 meters) of water. The well was drilled to a depth of 33,749 feet (10,287 meters). Appraisal drilling is to begin this year.

"The Anchor discovery, along with the previously announced Guadalupe discovery, are significant finds for us in the deepwater Gulf of Mexico," said Chevron’s Jay Johnson, senior vice president of upstream. Guadalupe, in the Lower Tertiary's Keathley Canyon Block 10, was drilled in almost 4,000 feet of water to a depth of 30,173 feet (see Daily GPI, Oct. 23, 2014).

Chevron U.S.A. Inc. operates Anchor with a 55% working interest. Houston's Cobalt International Energy Inc. holds a 20% stake, while Samson Offshore Anchor LLC and Venari Resources LLC each have a 12.5% share.

Chevron now has five deepwater drillships operating in the GOM, two focused on exploration, said Jeff Shellebarger, president of Chevron North America Exploration and Production Co.

The Anchor discovery underpins "further growth in the near-term," following recent project startups at Jack/St. Malo and Tubular Bells," he said.

The Chevron-operated Jack/St. Malo project, one of the top finds to date in the Lower Tertiary, ramped up late last year (see Daily GPI, Dec. 3, 2014). Total production by 2020 is forecast to reach 21 MMcf/d of natural gas and 94,000 b/d of crude oil. Hess Corp.-operated Tubular Bells moved into production also late last year (see Daily GPI, Nov. 28, 2014). Total recoverable resources from Tubular are estimated at 300-350 million boe.

Cobalt was formed in late 2005 (see Daily GPI, Dec. 2, 2005). Anchor is its fourth "significant" subsalt discovery in the deepwater GOM, executives said.

"The Anchor discovery well is clearly one of the best wells we've drilled to date in the deepwater Gulf of Mexico," said CEO James W. Farnsworth. "This exceptional discovery is the result of many years of hard work to identify and mature this exciting prospect and to successfully acquire and unitize the Anchor leases."

Cobalt's deepwater inventory also includes discoveries at Heidelberg, Shenandoah and North Platte, and with Anchor, offer some of "industry's best opportunities to provide long term growth in high value Gulf of Mexico barrels," said Farnsworth. "We look forward to the 2016 commencement of production from Heidelberg as it will represent Cobalt’s first production and revenue."

Also in the deepwater GOM, Cobalt anticipates spudding the first appraisal well on its North Platte Inboard Lower Tertiary discovery before the end of March with the newbuild Rowan Reliance drillship. The North Platte appraisal well is being drilled in Garden Banks Block 959.

Including the Heidelberg ramp-up, 2016 is expected to be a big growth year for the deepwater GOM, according to Wood Mackenzie (see Daily GPI, Nov. 13, 2014).

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