Petsec Energy eyes April production for Gulf of Mexico gas well

Petsec Energy ASX PSA drilling update gas oil Gulf of Mexico
The B-2 appraisal well in the Gulf of Mexico is expected to reach total depth in February, with production anticipated in April.

US-focused oil and gas junior Petsec Energy (ASX: PSA) is getting back on track at the Hummer gas and condensate field in the offshore Gulf of Mexico following recent drilling setbacks.

The company today announced that drilling would recommence at its Main Pass Block 273 B-2 appraisal well following cementing of the liner top and testing of the liner.

It is then planned to drill ahead to test six potential oil and gas reservoirs making up the well’s primary and secondary objectives, as originally planned.

The well is being drilled by the Ensco 68 jack-up drilling rig and is expected to reach a planned total measured depth of 5,657m in mid-late February.

Depending on the results of the well, Petsec said the production facilities will be expanded and the well will be completed for production.

First production is now anticipated to begin in early-mid April 2019 – four months after its previous schedule of mid-December 2018.

Setbacks and cost blowouts

The B-2 well was spudded in August last year and was planned to take 80 days to drill to its planned total depth. At the time of spudding, Petsec estimated the start of production in mid-December.

In November, Petsec reported the halt of drilling operations after the Main Pass 270 B platform and the drilling rig were struck by lightning during a serious thunderstorm. Repairs were made to the rig’s electrical equipment and when re-entering the hole, the well was unintentionally side-tracked.

By mid-December, operations were back on track and the well was drilled to 4,267m. Under-reaming operations began to open the well bore wider prior to running a drilling liner. However, the tool became stuck and needed to be fished out.

In January, operations to run the liner commenced, but then the liner also became stuck with fishing operations only partially successful.

In today’s project update, Petsec said it was then decided to cement the liner in place and proceed to drill ahead to test the well’s primary and secondary objectives.

Petsec has a 12.5% working interest in the Hummer project. The remaining 87.5% stake is held by private companies, including Houston-based Castex Offshore, the current project operator.

Due to the recent drilling complexities, Petsec said its estimated net cost to drill the well has increased from the US$2.6 million to US$5 million. Completion and additional production facilities costs have also varied up from US$1-1.2 million to US$1.2-1.5 million.

Hummer development project

The Hummer field lies in water depths of about 60m and has been estimated to extend over a strike length of 8km within three outer-continental shelf lease blocks, about 80km southeast of the Mississippi river delta.

The field was discovered in 2015 by the drilling of the maiden B-1 exploration well, which was brought into production in 2017.

B-2 is the second well to be drilled in the field, and the first of three, or up to a potential eight, appraisal wells planned to develop the Hummer project.

It is being drilled about 1.8km east of the B-1 discovery well and its primary objectives are two sand reservoirs with proven oil and gas reserves discovered in B-1 – one which is categorised as proved developed producing, and another which is proved and undeveloped.

The B-2 well’s secondary targets include three other reservoirs that were intersected in B-1 and another deeper horizon.

According to Petsec, similar reservoirs are productive in nearby fields at the Main Pass 280/283 Field Complex.

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