Vastar Resources has placed much of its hopes for the future inthe Gulf of Mexico as evidenced by its recent deal to acquireinterests in 23 producing fields through a three-way deal withAtlantic Richfield and Mobil (See Daily GPI Aug. 5, 1998). However,the company realizes it is not alone in pinning its hopes on theGulf and was wise to begin its Gulf of Mexico program when it did.
“The competition is clearly increasing,” Vastar CEO ChuckDavidson said earlier this week in Houston. “We’ve seen that inevery lease sale as we’ve continued on. Vastar has built up itsleasehold position in deep-water since really the beginning of1996. We now have approximately 125 blocks in the deep-water, andclearly we can see that as we continue on there are more and moreplayers entering into the deep-water.”
Davidson said it would be impossible for the company to buildthe deep-water position it has now if it were just starting today.”I say that for a couple of reasons. One is that it would be muchmore expensive to try to start over today, but two, as we all know,the industry has leased a large amount of acreage in the Gulf ofMexico, and clearly a lot of the key prospects have been andacquired and are now in various stages of exploration or furtherevaluation.”
Through its deal with ARCO and Mobil, Vastar is set to acquireinterest in, among other fields, Eugene Island 330, which ispredicted by the Department of the Interior’s Minerals ManagementService (MMS) to offer the greatest prospect for gas/oil recoveryat about 750 MMBoe. Vastar already holds an interest in Grand Isle43, ranked No. 3 by the MMS. In all, five Vastar fields rank amongthe MMS’ top 50; Six Mobil Fields rank among the top 50. And Vastarwill hold interests in 11 of the top 50 fields once it acquires theMobil properties.
Davidson also touted Vastar’s King discovery, which is in thesame vicinity as Gulf discoveries Mars and Ursa. First productionis expected from King some time in 2000. King offers potentialrecovery of 50 to 150 MMBoe. Vastar holds a 50% interest in theprospect. Also on the company’s list is a much larger prospect,Mirage, in which it holds a 75% working interest. Mirage could seerecovery ranging from 200 to 600 MMBoe, Davidson said.
“We do feel that today it would be almost impossible toduplicate the position that we’ve built up over the last couple ofyears.”
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