Unocal Corp.’s Spirit Energy 76 unit announced a “verysignificant” oil and gas discovery on the Mad Dog prospect in theGulf of Mexico deep-water Green Canyon block 826. The wellencountered 300 net feet of hydrocarbons, mainly crude oil. Aspokeswoman said more specific information about how much of MadDog reserves might be gas is not yet available.

Spirit Energy holds a 25% interest in the 2-1/2-block drillingunit that encompasses most of the Mad Dog structure. Based onavailable data, the company believes its net resource potential forthe Mad Dog drilling unit is likely in excess of 100 MMBoe andpossibly as high as 200 MMBoe.

Although further appraisal drilling is required to determine theextent of the discovery, Spirit Energy believes the gross resourcepotential within the drilling unit to be in excess of 400 MMBoe andas much as 800 MMBoe. If the upper range of this initial resourceestimate is confirmed, Mad Dog could be one of the largestdiscoveries yet announced in the Gulf of Mexico.

“Mad Dog is the second deepwater discovery we’ve announced thisyear, and it signifies a major step toward our goal of addingsubstantial value to the corporation through a successful deepwaterprogram in the Gulf of Mexico,” said Unocal CEO Roger C. Beach. “Webegan our Gulf of Mexico deep-water program from a standing startin 1997 and have quickly delivered results as we built an extremelyattractive prospect inventory for continued future success.”

David A. Johnson, Spirit Energy’s vice president forexploration, said the well likely represents the “trend opening”discovery for the Eastern Fold Belt and Salt Canopy play that thecompany was betting on when it acquired a considerable deepwateracreage position in last year’s Lease Sale 171. Unocal’s deep-waterholdings contain several other major prospects and leads in thistrend that have geological characteristics similar to Mad Dog.

BP Amoco is the operator of the Mad Dog well with a 64% workinginterest. BHP holds the remaining 11% interest. Spirit Energy 76also said it reached an agreement with Conoco to acquire a 50%working interest in the oil and gas lease covering Green CanyonBlock 562 (K2 prospect). The K2 prospect is just north of Mad Dogon the same geologic trend.

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