With field names like “Who Dat” and “Delta House,” one might think the folks at LLOG don’t take things very seriously. This couldn’t be farther from the truth. The company prides itself on its quiet success. It’s the largest private deepwater Gulf of Mexico (GoM) producer, the sixth most active deepwater GoM driller and the eighth largest deepwater GoM producer. According to a recent presentation, the company has no intention of going public, feeling that staying private gives it “greater degrees of freedom regarding the efficient and timely exploration and development” of its assets.

And those assets are impressive. The Who Dat Field is a floating production unit (FPU) located in 845 m (3,100 ft) of water. Ten wells are linked to the facility, and estimated reserves are 100 MMboe to 300 MMboe. The facility has a capacity of 60,000 bbl/d and 4.2 MMcm/d (150 MMcf/d). It was the first FPU in the GoM post-Macondo and the first built on spec. It went from concept selection to installation in less than a year and was the first privately owned FPU.

Delta House came onstream April 16, 2015, and was a truly ambitious project. Designed to develop multiple fields in the Mississippi Canyon Miocene play, the project came online only three years after the first discovery. The FPU engineering work and the bidding of construction yards began before the first well (Son of Bluto 2) was even drilled. This type of confidence seems to characterize the company’s philosophy and approach.

Good-looking Metrics
According to Eric Zimmermann, vice president of geology for LLOG, opportunity has driven the company in its almost 40-year history, from early successes on land in Louisiana and Texas to state waters, then the GoM Shelf and finally deep water.

“We continued to see opportunities develop in the offshore arena, so we started to work in deepwater areas and do some subsea tiebacks onto the shelf,” Zimmermann said. “As we saw opportunities present themselves, we became interested in bigger ways to develop to the point where we are today, where we’ve installed two floating production units that are producing our deepwater assets.”

The company boasts a remarkable 70% exploration success rate, and Zimmermann attributed that to several things. The company is geologically focused and is a good customer for companies that license multiclient seismic data.

“In the exploration arena our biggest driver is having large amounts of data,” he said. “Why would we want that? The more data we have, the more analog work we can do. We can study in greater detail and with greater success what we’ve done in our previous wells and what our competitors have done. “The more you can learn about the attributes for success and failure,
the more you can implement into your exploration and development programs.”

He added that new marine seismic technologies like wide-azimuth and broadband acquisition are critical in the near-salt and subsalt regions of the GoM, but he considers regional coverage equally important.

“Having a patch of expensive data doesn’t necessarily help you understand the play any better,” he said.

Safety is another important metric for the company, and LLOG is in the top 1% of the safest operating companies in the industry. “We as a smaller company realize that outsiders might wonder whether we can maintain our safety culture,” Zimmermann said. “That means we double up on our safety focus. I think from a cultural standpoint we have individuals who are responsible for all aspects of the safety culture. We recognize the responsibility of the individuals to that safety culture.”

Zimmermann attributes both the exploration success and the safety record to a focus on the fundamentals. “We like to say that we’re the most boring company in the Gulf of Mexico,” he said. “When we think of ‘boring,’ we think of ‘truly fundamental.’ We need all of the steps and processes that are intrinsic to hydrocarbon exploration to be in place before we drill a well. When you keep that methodical approach, you tend to see repeatable success.”

The company sticks to its guns on these fundamentals. Zimmermann added that LLOG is typically not the first entrant to a basin or play type. “We are close observers of the industry and try to figure out what has been successful and what has been unsuccessful,” he said. “Then we move quickly to replicate the successful and learn from the unsuccessful. We have a comfort in not being basin openers, and we also are comfortable being fast followers.”

Standardization is another key to LLOG’s success. Zimmermann said that leveraging the ability to develop assets quickly helps to lower the threshold of economic success. By speeding upcycle times and decreasing costs, the company can decrease its minimum commercial field size. “If we can differentiate ourselves in that area, we can be exploring in areas that may not be open to other companies that may have a longer development cycle or a larger cost structure,” he said.

He added that having a clear idea of how an asset will be developed before it’s even acquired is critical. LLOG has the internal expertise and the external relationships in place to execute the development plan, and it even keeps inventories of standard kit like subsea trees so that it’s not waiting on equipment.

“Typically, before we’ve acquired the prospect, we have a fairly well developed plan on how we’re going to bring that commodity to market,” he said.

So what about those field names? “We have a very serious business here,” Zimmermann said. “We have a high focus on safety, a high focus on investment. It’s the one place that the geologists and the prospect generators can have a little fun.”

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