A new frontier?

Davy Jones: Shallow Water, Deep Treasure

McMoRan’s recent Davy Jones discovery, already being called one of the largest discoveries on the Gulf of Mexico’s shelf in decades, will be in the spotlight in New Orleans.
McMoRan’s recent Davy Jones discovery, already being called one of the largest discoveries on the Gulf of Mexico’s shelf in decades, will be in the spotlight in New Orleans.

Mention of the legendary Davy Jones conjures up different meaning for different folks.

Gulf of Mexico explorers have their own unique take on the name.

For them, Davy Jones has become synonymous with opportunity.

It’s all about McMoRan Exploration’s recent colossal discovery of what might best be dubbed buried treasure in the ultra deep horizons on the shallow water shelf of the Gulf.

The Davy Jones prospect discovery well, operated by McMoRan in 20 feet of water off the coast of Louisiana at South Marsh Island Block 230, has been logged with pipe-conveyed wireline logs to 28,530. A total of 200 net feet of hydrocarbon bearing sands has been identified in six zones of the Wilcox section of the Eocene-Paleocene.

The well, which was a re-entry of a previously abandoned wellbore, is reported to have tapped into an estimated two to six Tcfe of reserves, according to some industry analysts.

Upon confirmation via development, Davy Jones is positioned to be one of the largest discoveries on the GOM shelf in decades. The scuttlebutt in the industry is that it has the potential to open up a whole new exploration frontier in the ultra-deep (>25,000 feet) horizons on the shallow water shelf.

To date, only seven wells have been drilled to a TVD of 25,000-plus feet in this region, according to veteran geologist and explorer James R. “Jim Bob” Moffett, co-chairman of the board at McMoRan.

The outgoing, often amusingly salty-tongued Moffett long has been recognized as an expert in the onshore Miocene. Known for its prolific production in this region, the Miocene doesn’t stop at the shoreline – and go-getter Moffett saw good reason to venture out into the shallow water Gulf to explore for deep gas.

A notable result of this effort is McMoRan’s Flatrock Field at South Marsh Island Block 212, where six wells currently produce over 300 MMcfe/d gross from the Miocene, with over 55 MMcfe/d net to McMoRan.

Given the expertise Moffett has honed over the years – sometimes relying on “Jimbob-ology” along with textbook geology – and the company’s success playing the shallow water deep gas, taking on the challenge of exploring the ultra-deep horizons was a kind of no-brainer.

McMoRan’s deep gas play focuses on large structures above the salt weld, i.e. listric fault, in the deep Miocene. The ultra-deep play targets objectives below the salt weld in the Miocene and older sections that have been correlated to those productive sections seen in deepwater discoveries by other companies.

Common Ground

The Davy Jones prospect was part of the package when McMoRan snapped up the Newfield GOM shelf properties in 2007. The deal also included the rights to the Blackbeard project, where the Blackbeard West well in 70 feet of water at South Timbalier Block 168 had been temporarily abandoned by operator ExxonMobil after reaching 30,067 feet measured depth.

This ultra-deep trend was previously dubbed the Treasure Island play – hence the exotic pirate nomenclature that appears to be right-on given the bounty apparently awaiting the drillbit.

Even though the GOM is one of the most mature provinces in the United States, both the deep gas and the ultra-deep gas plays are vastly unexplored.

Moffett noted that the Davy Jones well hit Eocene Wilcox sands that appear to be exceptional quality, e.g., 20-plus percent porosity and 10-20 ohms resistivity. The well is 100 miles south of any control in the deep Wilcox and 100 miles north of the deepwater Wilcox play.

“We’re talking about a rank wildcat in the middle of a very mature basin on a structure that covers 20,000 acres, four complete MMS sections,” he said. “The terrain below the salt is brand new territory.

“What we think Davy Jones and Blackbeard and deep drilling have done out there is to change the whole shelf topography and redefine the subsurface geologic landscape below 20,000 feet on the Gulf shelf,” Moffett said. “No one thought we’d be sitting here with this kind of opportunity.

“One of the biggest misconceptions we have is people think the shelf and the deepwater are two different geological provinces,” he added. “They’re not geological provinces, they’re engineering provinces.

“On the shelf you have standard platforms and drill standard wells, and they have construction around and go to a common facility,” Moffett noted. “Once you get below the salt weld, it’s all one basin.”

McMoRan deepened the Blackbeard well to 32,997 feet measured depth and found Miocene hydrocarbon-bearing sands. The top of the Wilcox is estimated to be below 34,000 feet.

“We haven’t tested it because we’re waiting on the outcome of Davy Jones and a few other things to be able to confirm the Miocene-Oligocene-Wilcox is the stratigraphic section we’re going to see,” Moffett said. “This basin is a lot more complex than we thought.

“But the data received to date from Davy Jones and Blackbeard West confirm McMoRan’s original modeling,” he emphasized, “which correlates the objective sections on the shelf below the salt weld in the Miocene and older age sections to those productive sections in deepwater discoveries made by others.”

Beneath 25,000 feet is the fold belt of the Miocene that’s been basically calibrated out in the deepwater, and Moffett noted that Davy Jones is “just a big old fold with four-way closure and not a salt dome with radial faulting.”

Of course, this is in stark contrast to the traditional trapdoor normal fault tectonics of the shallower deep gas play.

Tip of the Iceberg

Special equipment must be acquired to complete and flow test Davy Jones given the super high temperatures and pressures in the ultra-deep environment. Securing this equipment, dealing with various MMS issues, etc., prior to testing will take time.

“It’s going to take a lot of money,” Moffett added.

Production and development activity will benefit from the shallow water location near existing infrastructure.

Davy Jones and Blackbeard likely are only the tip of the proverbial iceberg.

McMoRan is one of the largest acreage holders on the GOM shelf and onshore in the Gulf Coast area and has rights to approximately a million gross acres – including 150,000 associated with the ultra deep gas play below the salt weld.

The company has two rigs under contract capable of drilling to the target depths to enable an active ultra-deep drilling program in 2010. There are about a dozen drill-ready prospects, and future prospective wells in this play include Blackbeard East, Lafitte and additional opportunities in the Davy Jones area – including an appraisal well to the southwest of the Davy Jones discovery.

Even though McMoRan currently has only two data points – Davy Jones and Blackbeard – to help with decision making over a huge area, the company does have the benefit of a 3-D seismic data base tying together the whole shelf area.

If you have a hankering to get in on this action and do your own thing, be forewarned – and not just because most acreage on the shelf is HBP.

“If you don’t understand the big picture, then you can’t understand this play,” Moffett emphasized.

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At ACE 2010...

James R. Moffett, co-chairman of the board for McMoRan Exploration Co., will give a paper titled “Davy Jones – A Major Wilcox Discovery and Its Implications for the Ultra-Deep Shelf Play in the Gulf of Mexico’s Shallow Waters,” at 11:30 a.m. Tuesday, April 13, at the AAPG Annual Convention and Exhibition in New Orleans.

Moffett’s talk is part of a four-paper session titled “Plays.” Other papers are:

  • R. Sassen – “Jurassic Condensate from Hudson Canyon, Baltimore Canyon Trough U.S. Atlantic.”
  • Donald Frye – “South Louisiana – Today and Tomorrow.”
  • Randol Haworth – “Ultra-Deep Play on the Gulf of Mexico Shelf.”

Reconsidering the Gulf

McMoRan Exploration’s recent ultra-deep major discovery tagged Davy Jones has generated considerable buzz in the industry and on Wall Street.

The geologic information revealed by the well, combined with other wells’ data, is redefining the subsurface geologic landscape below 20,000 feet on the Gulf of Mexico’s shallow water shelf, according to James R. “Jim Bob” Moffett and Richard Adkerson, co-chairman at McMoRan.

Significant points about the discovery include:

  • Wireline logs indicated 200 feet of net pay in six zones in the Wilcox section of the Eocene/Paleocene.
  • All of the zones were full to base.
  • Sands logged below 27,300 feet appear to be some of the highest quality Wilcox sands in the GOM.
  • Flow testing will be required to confirm the ultimate hydrocarbon flow rates from the six separate zones.

Interest in shallow-water deep-under-seabed gas was evident by the bids submitted at the Gulf of Mexico lease sale in late March.

Bids were received for 151 tracts in waters 650 feet deep or less, the Minerals Management Service said. That represents 32 percent of all tracts bid upon, an increase from the 2009 sale.

– LOUISE S. DURHAM

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