Shallow

There were few naysayers to the deal struck by Newfield Exploration Co. to sell its shallow water Gulf of Mexico (GOM) producing properties to McMoRan Exploration Co. for $1.1 billion (see Daily GPI, June 22). Credit analysts, including Fitch, view the transaction as a positive for Newfield’s plans now and into the future.

Canadian Superior Energy Inc. said Thursday that the consolidation of its deepwater “Mayflower” exploration license (EL 2406) and its shallow water “Mariner” exploration license (EL 2409) has been approved by the Government of Canada and the Province of Nova Scotia. The ruling allows Canadian Superior to apply a $10 million Mayflower work deposit to drilling the next Mariner well. The Mariner Project lands are located nine kilometres northeast of Sable Island, offshore Nova Scotia, encompassing an offshore area of 101,800 acres (100% Canadian Superior), and directly offsets five significant discoveries near Sable Island, including the ExxonMobil Venture natural gas field. Also, upon consolidation, the exploration term for Canadian Superior’s 100% deepwater “Mayflower” license (EL 2406) will be extended for two additional years, from the current expiry date of Dec. 31, 2006 to Dec. 31, 2008; and, thereafter, 50% of the license area will be extended for an additional two years to Dec. 31, 2010. Canadian Superior’s Mayflower deepwater project exploration license covers 712,000 acres and mapping to date indicates the presence of five sizeable deepwater prospects.

Just as they did in the U.S. onshore and in the shallow water of the Gulf of Mexico (GOM), the independents eventually will usurp the majors as the top producers in the deepwater GOM, Noble Energy CEO Chuck Davidson said last week.

Just as they did in the U.S. onshore and in the shallow water of the Gulf of Mexico (GOM), the independents eventually will usurp the majors as the top producers in the deepwater GOM, Noble Energy CEO Chuck Davidson said Monday.

Houston Exploration Co. said Friday it has completed its purchase of producing properties in the shallow waters of the Gulf of Mexico (GOM) from Orca Energy LP and BP Exploration & Production Inc. The combined purchase price of the properties was $145 million for 79 Bcfe. The assets are more than 80% natural gas and encompass 14 fields that are near existing operations in the GOM, the company said. Houston Exploration funded the transactions with a combination of cash on hand at the time of closing and debt from its revolving bank credit facility. In addition, as a result of the acquisitions, the company’s banking group has increased the available borrowing capacity for the organization to $400 million from $340 million.

Houston Exploration Co. said Friday it has completed its purchase of producing properties in the shallow waters of the Gulf of Mexico (GOM) from Orca Energy LP and BP Exploration & Production Inc. The combined purchase price of the properties was $145 million for 79 Bcfe. The assets are more than 80% natural gas and encompass 14 fields that are near existing operations in the GOM, the company said. Houston Exploration funded the transactions with a combination of cash on hand at the time of closing and debt from its revolving bank credit facility. In addition, as a result of the acquisitions, the company’s banking group has increased the available borrowing capacity for the organization to $400 million from $340 million.

Pioneer Natural Resources said it has released all of its existing shallow gas leases in the Matanuska-Susitna Valley in Alaska in response to a contentious debate with residential landowners over the leases and to new legislation affecting the area. The leases were part of its merger with Evergreen Resources that closed on Tuesday. The released leases cover 235,500 acres and include farm-outs and the Mental Health Trust lease No. AK550.185 located east of the Pioneer Unit near the town of Palmer. As a part of the strategic planning and due diligence associated with the merger, Pioneer decided to relinquish the leases issued under the over-the-counter leasing program and to withdraw the exploration license applications made by Evergreen in August. “We strongly support the state’s new gas-only leasing program defined by HB531, and we encourage them to continue the best interest finding process for the Mat-Su,” said CEO Scott D. Sheffield. “We support the efforts of the Mat-Su Borough Assembly to develop a regulatory program that recognizes the state’s primacy while at the same time representing the borough’s interests.” The leases being released were on residential land. Pioneer also holds nearly one million gross acres on the North Slope and has working partnerships with ConocoPhillips, Anadarko and others.

A sharp upward trend in unit operating costs in the shallow waters of the Gulf of Mexico (GOM) has added urgency to operators’ quests to effectively monitor and manage operating costs, according to Ziff Energy Group’s latest benchmarking study.

A sharp upward trend in unit operating costs in the shallow waters of the Gulf of Mexico (GOM) has added urgency to operators’ quests to effectively monitor and manage operating costs, according to Ziff Energy Group’s latest benchmarking study.