Encountered

Chevron Corp. said Tuesday it struck oil at its Moccasin prospect in the deepwater Gulf of Mexico (GOM).

CIG reported that during the final stages of repairs to its Totem Storage Field dehydration facility it encountered additional issues that prevented it from restoring full withdrawal capacity Thursday as previously planned (see Daily GPI, Dec. 17). Effective with Intraday 1 (Cycle 3) nominations for Thursday, Totem withdrawals were being reduced to the prorated scheduled quantity, CIG said, and any additional withdrawal nominations for subsequent cycles would be cut to zero until further notice. Injections remain unaffected by this outage, CIG noted.

Northern Natural Gas reported late Tuesday that Matagorda Offshore Pipeline System (MOPS), which it operates, had encountered an unexpected mechanical failure of the dehydration system on its onshore facilities near Tivoli, TX. “Crews are assessing the damage and determining the scope of repairs necessary to return the facility to service,” Northern said. Until then MOPS has been shut in, affecting 18 receipt points and seven delivery points (see the bulletin board for list).

An exploration well in the Gulf of Mexico (GOM) at the Vito prospect in Mississippi Canyon Block 984 has encountered more than 250 net feet of oil pay in subsalt Miocene sands, Anadarko Petroleum Corp., the well operator, reported. Anadarko has a 20% stake in the prospect; Shell Offshore Inc. holds a 55% working interest and is to become operator after the rig is released. StatoilHydro USA E&P Inc. holds the remaining 25% stake. The partners plan to evaluate the data from the Vito well and time an appraisal well, said Anadarko’s Bob Daniels, senior vice president, Worldwide Exploration. The Vito well was drilled to a total depth of 32,000 feet in 4,038 feet of water using the Noble Amos Runner deepwater drilling rig. Once operations are complete at Vito, Anadarko plans to move the rig to continue drilling operations at its operated Caesar/Tonga development in the Green Canyon area.

Maritimes & Northeast U.S. (M&N) said it learned that the Sable Offshore Energy Inc. (SOEI) production facility had encountered a decrease in output volume Friday. “Due to this decrease in supply, shippers sourcing their supply from SOEI should contact their supplier to get any information that may be desired concerning the cause, extent and duration of the event, as well as the potential of this event causing supply restrictions for current and/or future gas days,” M&N said. It added that all shippers must act to avoid the creation of due-pipe imbalances and not take due-shipper imbalance paybacks.

Kerr-McGee Corp. last week pumped up its 2006 capital program by $170 million to accelerate drilling onshore in the United States, which in turn is expected to boost estimated oil and natural gas production by 7-12% through 2008. About $50 million will be used to expand infrastructure in the Uinta Basin, including construction of a 250 MMcf/d gas processing plant, which could be expanded to 500 MMcf/d.

After pushing the February contract up to a $6.51 high just after 11 a.m. (EST), gas futures traders encountered a little bit of vertigo in afternoon trading as the market crept lower instead of approaching $7. The prompt month settled 1.5 cents lower at $6.388, while March futures, poised to take over as prompt month in Thursday Access trading, closed down 2.3 cents at $6.421.

Transocean Inc. said Friday that a problem encountered with a drill rig has temporarily suspended drilling operations for BP on the BP-operated Thunder Horse field at Mississippi Canyon block 822 in the Gulf of Mexico.

Shut-ins from Tropical Storm Isidore and property sales failed to slow down natural gas production for Magnum Hunter Resources Inc., which doubled its quarterly production from 2001. The Irving, TX-based independent reported actual production volumes of 19.8 Bcfe, averaging 215 MMcfe/d, and said its total equivalent production volumes were weighted 67% toward natural gas.