Magnum Hunter Resources Inc. and its partners are ramping up more production from their Gulf of Mexico (GOM) leases, which is helping the Irving, TX-based independent continue a string of offshore success that overall will yield an additional 20 MMcfe of new net daily production beginning in the fourth quarter.
The company on Monday said it had begun new production from its GOM South Timbalier 264B platform, where it holds a 70% working interest and a 5% net revenue interest. Two wells there are testing at a combined rate of 9 MMcf/d and 300 bbl/d.
The independent also participated in a new field discovery at West Cameron 403, with the first well encountering 106 feet of gas-productive sands at 7,750 feet. The well flow tested at a rate of more than 16 MMcfe/d. A caisson production structure is in the process of being installed, with initial production expected to begin in the first quarter of 2004.
Magnum Hunter owns a 40% working interest in West Cameron 403 and 33.33 % net revenue interest. Remington Oil & Gas Corp. owns a 60% working interest and is the operator.
Test results also are proving positive in two other GOM projects, the Vermilion 61 and the East Cameron 73. Casing has been set at the Vermilion well after finding 60 gross feet of productive sands. From the same surface location, the rig will drill the East Cameron 73 development location. Both wells will be completed after the second well is drilled.
Magnum Hunter owns a 25% working interest in both of these projects and 20.83% net revenue interest. Remington Oil & Gas Corp. owns a 50% working interest and is the operator.
“Our company’s daily oil and gas production from the Gulf of Mexico continues to increase each quarter,” said Chuck Erwin, senior vice president of exploration. “Gulf of Mexico production is now averaging around 65 MMcfe/d, which is approximately 31% of Magnum Hunter’s company wide net daily production.”
Erwin said, “with drilling rig and service costs remaining at unusually low levels in relation to current commodity prices, our Gulf of Mexico drilling activity has captured the largest piece of our company’s 2003 capital budget. The total potential reserve exposure from the company’s six remaining 2003 Gulf of Mexico exploratory projects, net to Magnum Hunter’s interest, exceeds 51 Bcfe.”
He added that since the company entered the GOM in May 1999, it had achieved an overall 83% drilling success rate, with 72 of 87 wells successfully drilled through Oct. 31, 2003. The company has an inventory of 171 Outer Continental Shelf blocks. Erwin said more than 1 Tcfe of risk-adjusted GOM drilling prospects have been identified by management and third-party consultants for future exploration activities.
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