Davy Jones, considered one of the biggest natural gas discoveries in the Gulf of Mexico’s shallow waters, faces several weeks of delay before commercial production begins after operator McMoRan Exploration Co. reported that a blockage has prevented a measurable flow rate in the first well.

The ultra-deep structure, which encompasses four lease blocks over 20,000 acres, may contain 2-6 Tcf. The No. 1 well, on South Marsh Island Block 230, was scheduled to begin commercial flow at the end of March (see Daily GPI, Jan. 18).

CEO Jim Bob Moffatt spoke with energy analysts Monday to explain the problems that were encountered last month. Production has been delayed by about five weeks, he said.

“The perforation of the Wilcox D sand resulted in positive pressure build-up in the wellbore, followed by a gas flare from the well,” he said. “Initial samples indicated that the natural gas from the Wilcox D sand is high quality and contains low levels of carbon dioxide [CO2] and no hydrogen sulfide [H2S].”

Low/no H2S is good news for gas drillers because it reduces the cost of processing and reduces the risk of corrosives wear and tear on equipment. Low levels of CO2 mean it’s less expensive to move the gas to pipelines specifications, and less reservoir space is taken by gases that can’t be sold.

However, Moffatt told analysts that a “blockage from drilling fluid associated with initial drilling operations prevented McMoRan from obtaining a measurable flow rate. Attempts to perforate the Wilcox C sand did not clear the blockage and McMoRan has commenced operations to remove the tubing from the well, clear the residual drilling fluid, and remove the perforating guns currently set across the Wilcox F sand to provide access to all of the Wilcox reservoirs — A through F totaling 200 net feet.”

To maximize the well’s production and enable effective formation penetrations, engineers plan to use electric wireline casing guns that are larger than the tubing guns used to perforate the Wilcox C and D sands, Moffatt said.

Meanwhile, operations at the No. 2 well continue unhindered and, in fact, that well could ramp up a bit sooner than the first well.

Interior’s Bureau of Safety and Environmental Enforcement last Friday issued the final permits for McMoRan’s current operations at Davy Jones. Operations now underway should enable a “measurable flow rate during the second quarter followed by commercial production shortly thereafter,” said Moffatt.

“Results of the limited test of Wilcox D sand reservoir indicate that our equipment and completion technologies have met the challenge of completing high pressure and high temperature wells,” he said. “We are also encouraged by the high quality initial samples of gas from the Wilcox D sand. Current operations are being initiated to remove the blockage of residual drilling fluid that has hampered flow from the Wilcox D sand and to provide access to all Wilcox sands encountered in the wellbore using powerful wireline casing guns capable of effective reservoir penetration.”

McMoRan operates the play with a 63.4% working interest and a 50.2% net revenue stake. Other stakeholders are Energy XXI (15.8%), JX Nippon Oil Exploration (Gulf) Ltd. (12%), and Moncrief Offshore LLC (8.8%).

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