For several analysts, the record-setting test results from Chevron Corp.’s Jack #2 well at Walker Ridge Block 758 in the ultra-deepwater Gulf of Mexico have confirmed the potential productivity of many Lower Tertiary discoveries. Currently, there is no Gulf of Mexico production of that age. “The announcement of Jack #2 is meaningful because it opens a new fairway, which could have 3- to 15 billion barrels of oil equivalent of recoverable reserves,” says Merrill Lynch analyst John Herrlin. The well is about 270 miles southwest of New Orleans and 175 miles offshore. Chevron is the operator with a 50% working interest while Devon Energy Corp. and Statoil each own 25%. The drilling broke Chevron’s 2004 Tahiti well-test record as the deepest successful test in the Gulf, drilled to 28,175 feet. Jack #2 was designed to evaluate a portion of the total pay interval, and the well sustained a flow rate of more that 6,000 barrels of crude oil per day, representing only 40% of the total potential flow. Chevron and partners plan to drill an additional appraisal well in 2007. Dan Pickering, with Houston-based Pickering Energy Partners Inc., says if Jack’s pressure tests didn’t find reservoir boundaries, the find could be a relatively homogenous reservoir that will need fewer wells. In the meantime, Pickering says he’s been fielding more reporter inquiries than investor calls on Lower Tertiary implications. For more on this, see the October issue of Oil and Gas Investor. For a subscription, call 713-260-6441.

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