Well depletion rates in the Gulf of Mexico have reached astartling 38% this year and within the next three years could reach49%, according to a report by Houston-based Simmons & Co.International.

“In 1999, 4.1 Bcf/d of deliverability must be replaced to simplykeep GOM production flat,” the report said, “This will require1,000 successful oil and gas completions. To put this inperspective, the average number of successful well completions inthe GOM was 940/year during the 1990s.” The study found that 80% ofcurrent daily production in the Gulf comes from wells drilled after1991, demonstrating the importance new wells have on production.”If you want to keep up,” said David Pursell, author of the report,”you have to keep drilling.”

An increasing depletion rate will have a major effect on theGulf’s 14 Bcf/d of gas production. The Gulf represents 27% of totaldomestic gas production. Eventually, Pursell told NGI, thedepletion problem, which is caused by the maturation of the Gulf,could be solved by subsalt drilling and western Canadian resources.Over the next two years, however, Pursell believes that shelfdrilling must remain high to compete with demand. “In theintermediate term [next two years], Canadian gas imports cannotoffset this depletion. This means shelf drilling must remainrelatively robust to maintain supply.” Pursell said the reportfalls short of pessimism, “We’re not saying the sky is falling.We’re not saying the Gulf will turn into a dead sea. We areinterested in macro energy issues and GOM well depletion is a majorfactor in the U.S. energy industry. People already know this, butwe wanted to put some numbers behind it.”

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