Kosmos Energy Announces New Exploration Licenses Offshore Mauritania

 Kosmos Energy (NYSE: KOS) announced today that it has signed three Production Sharing Contracts (PSCs) with the Government ofMauritania for Blocks C8, C12, and C13 offshore Mauritania. The contracts will take effect upon formal ratification by the Government of Mauritania. The blocks, which are contiguous, range in water depth between 1,600 and 3,000 meters (approximately 5,250 to 9,800 feet), and have a combined acreage extent of approximately 27,200 square kilometers (6.7 million gross acres).

Kosmos will be operator of the three blocks with a 90 percent interest. The national oil company, Societe Mauritanienne des Hydrocabures (SMH), will hold a carried interest of 10 percent. In the initial exploration phase under each of the contracts, Kosmos plans to acquire 2D and 3D seismic data. The Company targets first drilling as early as 2014. The execution of the PSCs represents Kosmos’ initial entry into Mauritania and significantly expands the Company’s exploration footprint.

Brian F. Maxted, Chief Executive Officer, commented, “With our exploration program focused on unlocking new petroleum systems by drilling multiple basin-opening wells on an annual basis, the offshore Mauritania opportunity fits very well strategically with Kosmos’ existing portfolio. We have now captured approximately 24 million gross acres of high-impact exploration potential, with additional new venture initiatives ongoing to selectively further our opportunity set. The new blocks captured reside in the proven offshore Mauritania salt basin and include the outboard fairway of the under-explored Upper Cretaceous stratigraphic play concept, Kosmos’ core exploration theme. We look forward to initiating a seismic program over the blocks towards the end of this year or early next year.”

Source: Kosmos Energy

Posted on 4/09/2012 / 0 comments / Read More

McMoRan Expects Davy Jones Commercial Flow Soon

McMoRan Exploration Co. today provided an update on flow testing activities at the Davy Jones No. 1 well on South Marsh Island Block 230. Technical completion has been achieved successfully and work is ongoing to establish commercial production from the well.

 The perforation of the Wilcox “D” sand resulted in positive pressure build-up in the wellbore followed by a gas flare from the well. Initial samples indicated that the natural gas from the Wilcox “D” sand is high quality and contains low levels of CO2 and no H2S. Blockage from drilling fluid associated with initial drilling operations prevented McMoRan from obtaining a measurable flow rate. Attempts to perforate the Wilcox “C” sand did not clear the blockage and McMoRan has commenced operations to remove the tubing from the well, clear the residual drilling fluid, and remove the perforating guns currently set across the Wilcox “F” sand to provide access to all of the Wilcox reservoirs (“A” through “F”) totaling 200 net feet.

To maximize production from the well and enable effective formation penetrations, McMoRan plans to use electric wireline casing guns that are larger than the tubing guns used to perforate the Wilcox “C” and “D” sands. The Bureau of Safety and Environmental Enforcement (BSEE) issued the final permits on Friday, April 6, 2012 to approve the current operations. McMoRan expects the operations currently under way will enable a measurable flow rate during the second quarter of 2012 followed by commercial production shortly thereafter.

James R. Moffett, Co-Chairman, President and CEO of McMoRan, said,“We are pleased to report that we have achieved a major engineering milestone in completing the first sub-salt well in the shallow waters of the Gulf of Mexico and are making continuing progress to convert our geologic success into commercial success. Results of the limited test of Wilcox “D” sand reservoir indicate that our equipment and completion technologies have met the challenge of completing high pressure and high temperature wells. We are also encouraged by the high quality initial samples of gas from the Wilcox “D” sand. Current operations are being initiated to remove the blockage of residual drilling fluid that has hampered flow from the Wilcox “D” sand and to provide access to all Wilcox sands encountered in the wellbore using powerful wireline casing guns capable of effective reservoir penetration. We look forward to the results of these activities and the establishment of commercial production from the well.”

Davy Jones involves a large ultra-deep structure encompassing four OCS lease blocks (20,000 acres). McMoRan is the operator and holds a 63.4 percent working interest and a 50.2 percent net revenue interest in Davy Jones. Other working interest owners in Davy Jones include: Energy XXI (NASDAQ: EXXI) (15.8%), JX Nippon Oil Exploration (Gulf) Limited (12%) and Moncrief Offshore LLC (8.8%).

Source: McMoRan

Posted on 4/09/2012 / 0 comments / Read More