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PanCanadian Gulf Find Similar to Auger

June 29, 1998
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PanCanadian Gulf Find Similar to Auger

PanCanadian Petroleum subsidiary PanCanadian Gulf of Mexico Inc., made a deep-water oil and gas discovery in the Gulf of Mexico that it likened to Shell's prolific Auger Field. The Llano discovery well, in Garden Banks Block 386 about 137 miles offshore Louisiana, drilled to a record depth for the Gulf of 27,864 feet.

The sands at Llano correlate closely to similar sands encountered by Shell Deepwater Development in the Auger Field, less than 15 miles to the southwest, containing a reported 220 million barrels of oil equivalent reserves. Auger has reported reserves of 220 million Boe with production of 100,000 barrels of oil and 300 MMcf/d of gas.

"This sets the stage for additional drilling on the significant lands we hold in the deepwater," said Gerry Macey, PanCanadian senior vice president for exploration. "This well proved to be highly challenging and has stretched the envelope of drilling in the Gulf of Mexico's deepwater. It opens a new exploration and development frontier for PanCanadian."

The drilling of Llano, in about 2,700 feet of water, initially reached a depth of 25,340 feet when drilling was suspended due to rig limitations. In April, the larger-capacity Sedco Omega rig resumed drilling to make Llano the deepest well drilled in the Gulf to date. The depth of the pay intervals also makes Llano the deepest hydrocarbons discovered in the Gulf.

Currently the well is undergoing final evaluation before casing, and partners are investigating appraisal and production scenarios. An appraisal well on the Llano prospect is planned for later this year. PanCanadian holds a 20% interest in this discovery and 20% to 25% working interest in three additional blocks adjacent to Llano. The other partners in the Llano well are the operator, EEX Corp. of Houston with 30%, Enterprise Oil of London with 30%, and Mobil Corp. of Fairfax, VA, with 20%.

Core samples, pressures and fluid samples at depth will be captured, in addition to electric logs, and will be used to evaluate the feasibility of early production through tie-back options to EEX's Cooper Facility on Garden Banks Block 388 concurrently with evaluations for stand-alone production facilities.

The Cooper facility can handle 120 MMcf/d of gas and 40,000 b/d of crude. EEX spokesman John MacDonald said the facility's capacity could be expanded by removal of a drilling rig and addition of processing infrastructure. This would add about 30% to its capacity.

MacDonald said the first appraisal well could be finished by the end of the year and a decision on whether to make an early tie-back to Cooper won't be made until sometime in the first half of next year. The company might opt to tie-back one or two appraisal wells to Cooper to generate early cash flow before a stand-alone production facility is installed. Gas leaving the cooper facility flows on an EEX line which is connected to a shallow water facility at Eugene Island.

Joe Fisher, Houston

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