1,600 35 106 Million BOE Discovered 1,400 1,200 1,000 800 600 400 30 includes Auger 10 9 8 includes Mars 13 Reserves & resources Percent wells drilled 10 includes Thunder Horse & Mad Dog includes N. Thunder Horse 30 25 20 15 10 Percent <strong>of</strong> Wells Drilled 4 200 3 3 4 1 2 1 1 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Reserves & resources 1096.431 1033.227 713.1991 402.4035 1339.217 672.2695 281.9353 143.1564 342.3876 627.8707 1515.078 25.83244 1457.957 28.19391 134.8227 Percent wells drilled 30 10 9 8 13 4 3 3 4 10 1 2 1 1 1 5 0 Year <strong>of</strong> Lease Term Figure 74. Year in the lease term in which BOE was discovered and percent <strong>of</strong> leases were tested, for deepwater leases, 1974-1994.
data for this analysis include only deepwater leases acquired through 1994, since later leases are still within their primary terms. As expected, the majority <strong>of</strong> wells are drilled in the first half <strong>of</strong> a lease’s primary term, and the majority <strong>of</strong> hydrocarbons are also found during the same period. What is surprising is the amount <strong>of</strong> major discoveries found in the later years <strong>of</strong> some leases’ terms. Certainly, the discoveries <strong>of</strong> Thunder Horse, North Thunder Horse, and Mad Dog, occurring late in their lease terms, have greatly impacted these volume totals. This demonstrates the difficulty in recognizing the best prospects at the beginning <strong>of</strong> a lease’s term. DRILLING THE LEASE INVENTORY The combination <strong>of</strong> huge deepwater lease inventories and a limited rig fleet dedicated to the GOM means that the vast majority <strong>of</strong> today’s leases will remain untested when their terms expire. Figure 75 shows historical lease activity trends. As mentioned previously, these data are complete only through 1993, since most deepwater leases beyond that time are still under their primary terms and still under evaluation. Similar to today’s large lease inventory is the period from 1988 to 1989, during which large numbers <strong>of</strong> new leases were acquired. The percentage <strong>of</strong> leases drilled decreased as lease inventory swelled, because <strong>of</strong> a limited number <strong>of</strong> available rigs. During times <strong>of</strong> high lease inventory, fewer than 10 percent <strong>of</strong> deepwater leases were drilled and fewer than 5 percent were produced. Figures 76a-b show that the reduction in drilling (figure 33) is not related to a lack <strong>of</strong> success in finding hydrocarbons. Exploratory drilling is arguably the most important indicator <strong>of</strong> exploration effort. Figures 76a-b use the number <strong>of</strong> newly drilled leases as the measure <strong>of</strong> this effort. The general relationship between exploration effort and amount <strong>of</strong> hydrocarbons discovered is shown in figure 76a. The amount discovered includes reserves, resources, and industry-announced discoveries (same data as figure 56). Notice that, in the last two years there has been a decline in the number <strong>of</strong> new leases tested and in the amount <strong>of</strong> hydrocarbons discovered. Much <strong>of</strong> the drop in the amount discovered is caused by the 24-month delay in industry’s release <strong>of</strong> proprietary drilling results. Volumes in 2002 and 2003 are, therefore, significantly understated. Figure 76b shows the average volume <strong>of</strong> hydrocarbons added for a tested lease. Although the scatter <strong>of</strong> data points is wide, the trend shows an increasing volume discovered per lease drilled. The figure shows that there is no decline in exploration rewards in the deepwater GOM. With the addition <strong>of</strong> complete discovery results for years 2002 and 2003, the trend will continue to increase. Although the percentage <strong>of</strong> leases drilled decreased during the late 1980’s, the actual number <strong>of</strong> leases issued and drilled generally increased, resulting in higher numbers <strong>of</strong> discoveries and producing leases. These relationships among leasing, drilling, and production <strong>of</strong> <strong>of</strong>fshore deepwater blocks are shown in figures 77a-c. There is only a general correlation between the number <strong>of</strong> leases issued and those drilled and produced (figures 77a-b). In contrast, the number <strong>of</strong> deepwater leases drilled correlates strongly with the number <strong>of</strong> those leases that later produced (figure 77c). Figure 78 illustrates the magnitude <strong>of</strong> the deepwater lease inventory and industry’s ability to evaluate this large number <strong>of</strong> leases. The annual historic lease data from 1984 through 2003 are in the solid colored lines and depict the number <strong>of</strong> primary term leases, number <strong>of</strong> leases tested, and the number <strong>of</strong> leases expiring untested. The large increase in lease inventory from 1996 through 2000 is very evident and propagates through to 2010. Future values for primary term leases, lease expirations, and leases drilled are in the dotted lines. These values assume that, after the year <strong>2004</strong>, all leases will expire unless drilled and that 60 untested deepwater leases will be drilled each year. A historic review <strong>of</strong> GOM exploration activity indicates that, on average, about 10 percent <strong>of</strong> the deepwater leases acquired in the large sales are drilled. Of the approximately 3,200 deepwater leases issued from 1996 through 2000, however, only 6.5 percent have been drilled to date. There are over 2,400 leases from these sales still in their primary lease term, with more than 750 <strong>of</strong> these leases in water depths <strong>of</strong> greater than 7,000 ft (2,134 m). Only 34 wells have been drilled on the ultra-deepwater leases 107
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ON COVER - The cover features four
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Table of Contents Page PREFACE.....
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Figures Page Figure 1. The Gulf of
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Figures — continued Page Figure 5
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Tables Page Table 1 List of Deepwat
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INTRODUCTION The deepwater Gulf of
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BACKGROUND DEFINITIONS The GOM Oute
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EXPANDING FRONTIER When the origina
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1992 - 1993 Louisiana Mississippi A
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1992 - 2003 Texas Louisiana Mississ
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fffffffffffffffff 1500 ft Quaternar
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In addition to the traditional oil
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15 Figure 8. Gas hydrates on the se
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1998 - 1999 Louisiana Mississippi A
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4,500 4,000 Number of Active Leases
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ENVIRONMENTAL ACTIVITY The extensiv
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Operators submit a remotely operate
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25 Figure 15. Loop and eddy current
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1975 - 1979 Louisiana Mississippi A
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29 Deepwater Discoveries $ #Y Texas
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31 Texas ð PORT ARANSAS 1000 ft 15
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Louisiana Mississippi Alabama 33 Te
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Pipelines New pipelines Proposed pi
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LEASING Until the mid-1990's, leasi
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Number of Leases Bid On 600 500 400
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1998 - 1999 Louisiana Mississippi A
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1992 - 1993 Louisiana Mississippi A
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2004 - 2005 (741 leases) Louisiana
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DRILLING AND DEVELOPMENT Deepwater
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49 Figure 30. The Discoverer Deep S
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51 Number of Wells Spudded 250 200
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120 > 7,500 ft 107 108 100 5,000 -
- Page 69 and 70: 1998 - 1999 Louisiana Mississippi A
- Page 71 and 72: 1998 - 1999 Louisiana Mississippi A
- Page 73 and 74: 180 160 Deepwater EP Deepwater DOCD
- Page 75 and 76: 340 626 390 472 472 456 393 475 590
- Page 77 and 78: Year of First Production Table 4 De
- Page 79 and 80: Year of First Production Table 4 De
- Page 81 and 82: A predominant workhorse of the GOM
- Page 83 and 84: 3 Number Installed 2 1 0 2004 69 TL
- Page 85 and 86: Flow lines to host platform Subsea
- Page 87 and 88: 140 131 120 100 78 Number of Wells
- Page 89 and 90: RESERVES AND PRODUCTION The deepwat
- Page 91 and 92: 77 Million Barrels of Oil Equivalen
- Page 93 and 94: 18 16 14 12 10 8 Number of Fields 6
- Page 95 and 96: 81 Million Barrels of Oil Equivalen
- Page 97 and 98: 45,000 40,000 Million Barrels Oil E
- Page 99 and 100: 1992-1993 1994-1995 1996-1997 Lease
- Page 101 and 102: S hallo w- wa ter GOM 11% Deepwater
- Page 103 and 104: 1,200,000 1,000,000 Total productio
- Page 105 and 106: 1,100,000 1,000,000 Subsea oil Tota
- Page 107 and 108: 900,000 800,000 Majors Nonmajors 70
- Page 109 and 110: 45,000 40,000 Max oil rate 1,000-1,
- Page 111 and 112: 4,000 3,500 Shallow water Deepwater
- Page 113 and 114: Texas Auger Louisiana SS182 Troika
- Page 115 and 116: SUMMARY AND CONCLUSIONS This report
- Page 117 and 118: 2,500 Number of leases Average U.S.
- Page 119: Number of Years 14 12 leas es in p
- Page 123 and 124: 80 2500 70 60 Number of leases dril
- Page 125 and 126: 4,500 4,000 3,500 Leases tested Lea
- Page 127: • Nonmajor companies have made mo
- Page 131: REFERENCES Bascle, B. J., L. D. Nix
- Page 134 and 135: Project Name Area/Block Water Depth
- Page 136 and 137: Project Name Area/Block Water Depth
- Page 138 and 139: Project Name Area/Block Water Depth
- Page 140 and 141: Project Name Area/Block Water Depth
- Page 142 and 143: Project Name Area/Block Water Depth
- Page 144 and 145: Project Name Area/Block Water Depth
- Page 146 and 147: Sale Number Sale Location Sale Date
- Page 148 and 149: Completed Studies [MMS Study Number
- Page 150 and 151: Group Name Company Name MMS Number
- Page 152 and 153: Group Name Company Name MMS Number
- Page 154 and 155: Appendix G. Subsea Completions. Are
- Page 156 and 157: Area Block API Number Operator Comp
- Page 158 and 159: Area Block API Number Operator 144
- Page 160 and 161: Area Block API Number Operator Comp
- Page 162 and 163: Area Block API Number Operator Comp
- Page 164 and 165: Year Shallowwater Oil (MBOPD) Deepw