GULF COAST

1 Southwest Texas' Real County could get its first producing well, if completion work is successful at San Antonio independent Rio-Tex Inc.'s #1 Hutto, Felix Taylor Survey, A-758. IHS Energy Group reports Rio-Tex set pipe on bottom at 7,120 ft. and is waiting on completion tools at the wildcat. In neighboring Bandera County, a lightly drilled county to the east, pipe has been set to a total depth of 7,425 ft. at the #1 Camp "177" that was drilled by Devon SFS Operating Inc., Oklahoma City. The prospect is in TT RR Co. #177 Survey, A-475. A second wildcat-the 7,600-ft. #1 Davis Hord "77"-is being drilled by Devon at a site nearly 5.5 miles southwest in TC RR Co. #77 Survey, A-977, Bandera County. 2 Suemaur Exploration & Production LLC, Corpus Christi, gauged a flow of 11.026 million cu. ft. of gas, 41 bbl. of condensate and 131 bbl. of water per day at the #1 J.W. Henderson, a discovery in Willacy County, Texas. The company used a 14/64-in. choke to test through perforations between 14,141-14,204 ft. The well is in Block 28, Lot 8, Jose Narcisco Cabazos Survey, A-8. 3 A discovery completed by Allegro Investments Inc., Victoria, Texas, in Jackson County, Texas, is flowing at a restricted rate of 2 million cu. ft. of gas and 96 bbl. of condensate per day on an 8/64-in. choke from Eocene Yegua at 10,300 ft., according to 27% working interest owner Parallel Petroleum Corp., Midland. It's the 19,000-ft. #1 Signal Hill in Juan Fernandez Survey, A-21, on the 5,000-acre Tortuga Prospect. About six miles northeast, Allegro has run pipe to 17,219 ft. at the wildcat #1 Elk Hills that bottomed at 18,025 ft. Parallel says Eocene Wilcox sands between 14,000 ft. and 17,300 ft. will be tested. The #1 Elk Hills, Nestor Clay Survey, A-13, is on the 6,000-acre Matterhorn Prospect. The rig is being moved to a third wildcat, the #1 Long Beach, that's another 18,000-ft. Wilcox test. It's on the 6,000-acre Everest Prospect. Working interest owners in the #1 Elk Hills include Parallel Petroleum with 27%; Beta Oil & Gas Inc., 16.13%; Republic Resources Inc., 3.125%; and Unit Corp., 6.875%. Allegro is the operator. 4 IHS Energy Group reports a Houston firm, Smith Production Inc., recorded a flow of 7.439 million cu. ft. of gas, 345 bbl. of condensate and eight bbl. of water per day at the #1 Henderson, a discovery completed in Liberty County, Texas. The well, in Robert Burrell Survey, A-138, flowed on a 12/64-in. choke through perforations at 11,001-07 ft. The only log top reported is that of Yegua at 10,800 ft. 5 Esenjay Exploration Inc., Houston, says it production-tested 22 million cu. ft. of gas and more than 500 bbl. of condensate per day through a 25/64-in. choke from the unstimulated Claughton interval of Lower Frio at the #7 Runnells in Matagorda County, Texas. The well, in Nicholas Clopper Survey, A-16, had a target depth of 16,000 ft. It's the second delineation well drilled in Runnells Field and the third consecutive producer completed in the field, which was established on the company's Duncan Slough 3-D seismic project in December 2000. Once the #7 Runnells is turned to sales, Esenjay expects that total daily production from the three wells will be approximately 50 million cu. ft. of gas and 1,500 bbl. of condensate. 6 A high rate of flow-20.077 million cu. ft. of gas, 28 bbl. of condensate and 202 bbl. of water per day-is attributed to the #1 Warneke, a Brazoria County, Texas, well completed by Reliant Exploration Ltd., Houston. Located in William McDermott Survey, A-341, the well yielded the flow on a 16/64-in. choke through perforations between 17,620-18673 ft. Frio-at 7,725 ft.-is the deepest log top reported. 7 The #1 Rainbolt Ranch "A" is an exploratory reef test in Leon County, Texas, where Anadarko Petroleum Corp., Houston, has set pipe to a total depth of 17,977 ft. IHS Energy Group reports the wildcat was drilled in Joel Langham Survey, A-489, nearly two miles southeast of the one-well Stucky Field where gas is produced from 16,832-16,996 ft. in Jurassic Cotton Valley. 8 Amerada Hess Corp., New York City, gauged a flow of 1.53 million cu. ft. of gas and three bbl. of condensate per day at completion of a discovery in Louisiana state waters offshore Plaquemines Parish. The #1 State Lease 16823 is on Breton Sound Block 19. Testing, through perforations at 5,260-65 ft., was carried out using a 10/64-in. choke. 9 The Minerals Management Service received $340.5 million in high bids at the eastern Gulf of Mexico OCS Sale 181 in New Orleans in December. The high bids were for 547,200 acres, with an average per-acre bid of $622.21. In all, 190 bids from 17 companies, totaling $458.9 million, were submitted for 95 deepwater tracts. All the tracts offered are in water deeper than 5,200 ft. Anadarko Petroleum Corp. made the highest offer for a tract-$26 million, or $4,516.50 per acre, for Lloyd Ridge Block 91. Shell Offshore Inc. led in the number of high bids with 28, totaling $109.6 million, followed by Anadarko with 26 for $136 million. Lloyd Ridge Block 446, in approximately 9,500 ft. of water, was the sale's deepest water tract. It received a high bid of $21.1 million from Shell. 10 ExxonMobil Corp. has completed the Hawkes and Timber Wolf exploration wells in the Mississippi Canyon area of the Gulf of Mexico. Both wells discovered hydrocarbons in Miocene reservoirs. The Hawkes wildcat (#1 OCS-G-21765 on Block 509) was drilled in 4,174 ft. of water to a total depth of 23,143 ft., while the Timber Wolf wildcat (#1 OCS-G-21770 on Block 555) was drilled in 4,749 ft. of water to a total depth of 23,105 ft. Marathon Oil Co. and Woodside Energy (USA) Inc. are coparticipants in Timber Wolf. ExxonMobil reports it is now drilling the wildcat #1 OCS-G-22914 on Mississippian Canyon Block 912 that's part of its 100%-owned Keltics Prospect. The venture is in 6,695 ft. of water and permitted to a depth of 26,000 ft. In addition to Block 912, the prospect includes Block 956. 11 Kerr-McGee Corp., Oklahoma City, has confirmed its Garden Banks Block 244 discovery. A down-dip sidetrack-the #2 (ST2) OCS-G-15860-encountered additional oil and gas pays. The company is drilling an up-dip sidetrack to establish the full column size of the field. Kerr-McGee estimates the gross reserves for the field to be about 40 million bbl. of oil equivalent. 12 Logging results confirmed approximately 400 ft. of net pay at the #1 OCS-G-17358, in 2,610 ft. of water on Garden Banks Block 385, according to PanCanadian Energy Co., Calgary. The well, the fourth one completed in Llano Field, was drilled to a measured total depth of 24,813 ft. and tested the western continuation of the reservoirs. PanCanadian reports this is the last well needed to plan for development of the field, in which it has a 22.5% interest. Coventurers are Houston-based Enterprise Oil Gulf of Mexico Inc., the operator; Mobil Producing Texas & New Mexico Inc., an affiliate of ExxonMobil Corp.; and Amerada Hess Corp. 13 Shell Exploration & Production Co. says a third producing subsea system was added to its Auger tension-leg platform when Shell's 100%-owned subsea production system began producing from two wells in Serrano Field (Garden Banks blocks 516 and 472) in December. Serrano's wells are producing 52.5 million cu. ft. of gas and 4,625 bbl. of oil per day. Development costs for Serrano, in about 3,400 ft. of water, are approximately $120 million, excluding lease costs. Total gross ultimate recovery is estimated at 50 million bbl. of oil equivalent. Peak production is expected to be 160 million cu. ft. of gas per day this year. Auger's first subsea production system, Macaroni, began production in 1999 and the second one, Oregano, started producing in October. 14 Conoco Inc., in partnership with Ocean Energy Inc., Houston, plans to develop Magnolia Field on Garden Banks blocks 783 and 784 in nearly 4,700 ft. of water. Initial estimates call for the $600-million development project to deliver 150 million bbl. of oil equivalent. Design capacity of the production facilities will be 50,000 bbl. of oil and 150 million cu. ft. of gas per day. First production from the field is anticipated in the fourth quarter of 2004, with peak production occurring in 2005. Conoco, operator, holds a 75% working interest in the field; Ocean Energy, 25%. 15 A flow of 2.66 million cu. ft. of gas per day was gauged by Lewis Oil Corp., Gulfport, Miss., at the #1 International Paper 7-10 in Section 7-8s-15w, Hancock County, Miss. The Southeastern Oil Review reports the well was gauged on an 18/64-in. choke through perforations at 4,080-98 ft. in Amphistegina. The new producer is 0.5-mile southeast of Lewis' opener of Mariner Field, which yielded gas at a much lower rate-624,000 cu. ft. per day. The discovery is the #1 International Paper 7-5, also in Section 5, that was gauged on a 10/64-in. choke through perforations at 3,944-56 ft.