Oil and gas output has ramped up at the Appomattox floating production system in the deepwater Gulf of Mexico (GOM) months ahead of schedule, operator Shell Offshore Inc. said Thursday. 

Appomattox, which currently has an expected production of 175,000 boe/d, is the first commercial discovery now brought into production in the Norphlet formation, the Royal Dutch Shell plc subsidiary said. It had been scheduled to begin operations by year’s end.

“That Appomattox was safely brought online ahead of schedule and far under budget is a testament to our ongoing commitment to drive down costs through efficiency improvements during execution,” said upstream director Andy Brown. “Appomattox creates a core long-term hub for Shell in the Norphlet through which we can tie back several already discovered fields as well as future discoveries.”

Appomattox is a joint venture between Shell (79%) and China’s CNOOC Petroleum Offshore USA Inc., a subsidiary of CNOOC Ltd. (21%). The floating production system is 80 miles southeast of Louisiana in about 7,400 feet of water.

In 2010, Appomattox was an industry first in a series of commercial discoveries by Shell in the Norphlet. Last year Shell struck its sixth discovery in the Norphlet play after encountering more than 800 net feet of pay at the Dover discovery. Dover, 100% owned, is about 13 miles from the Appomattox system and is considered an attractive potential tieback, according to Shell.

Appomattox is considered “a story of efficiency through innovation,” according to Shell. Using optimized development planning, design and fabrication, as well as expert drilling execution, Appomattox has realized cost reductions of more than 40% since it was sanctioned in 2015.

“The start of production at Appomattox is only just the beginning of further maximizing the flow of resources in the prolific Norphlet surrounding Appomattox,” the supermajor said. The Norphlet formation dates back 150-200 million years ago to the Jurassic period.

For oil production, the floating production system is served by the Mattox Pipeline Co. LLC, a 90-mile, 24-inch diameter system with 300,000 b/d capacity that moves crude westward to the Proteus pipeline system and then onshore. Mattox is jointly owned by Shell GOM Pipeline Co. LLC and CNOOC Petroleum Sales USA. Inc.

Shell’s global deepwater business has development and exploration opportunities not only in the United States, but also in Brazil, Mexico, Nigeria, Malaysia, Mauritania and the Western Black Sea. Production worldwide is on track to reach more than 900,000 boe/d by 2020 from already discovered, established reservoirs. 

The company, which continues to be one of the largest leaseholders in the U.S. deepwater, said since 2014 it has reduced its unit development costs and unit operating costs by about 45%.