September 30, 2016

ExxonMobil may bring another rig by yearend – Financial Officer

US oil and gas giant ExxonMobil could bring a second offshore drilling rig to accelerate development of its holdings off Guyana after appraising the initial Liza find and drilling a pair of wildcat wells.Oil_platform_P-51_(Brazil)
According to oil and gas online newspaper, John Reilly, Chief Financial Officer of another US-based oil company Hess, was confident that with further success on the exploration side and discussions with its partner, ExxonMobil, it “could potentially be bringing in another rig towards the end of this year and which would potentially be running a two-rig programme in 2017”.
Hess had partnered with ExxonMobil on the discovery back in May of 2015.
According to upstream, ExxonMobil is chasing a series of lookalike prospects in the Cretaceous fan trend that was proved with the Liza discovery, and plans a pair of wildcats in addition to two appraisals at Liza.
“Now that we have tuned the logs to the seismic, we believe you can see these other fans quite clearly,” Hess’s Chief Operating Officer Greg Hill said.
Hess has already allocated some US$70 million in 2016 to look at field development options for Liza, but Reilly cautioned that that figure could increase next year.
“If the appraisal wells go well on Liza, (that could mean) potentially sanctioning a project there and having further development costs,” Reilly said.
Reilly explained that the potential fast-tracking of drilling and field development offshore Guyana was a large driver in Hess tapping equity markets for more than US$1.4 billion through a common and preferred share offer earlier this month.
He said the four planned offshore wells will cost around US$250 million each and there would be additional costs associated with early development of the Liza field.
Hess remains optimistic on Liza despite the downturn in oil prices owing to a number of factors.
The Liza discovery has a “fantastic reservoir” with high permeability, with water depths and formation depths that are shallower than those seen in the US Gulf of Mexico.
“This isn’t the deepwater Gulf of Mexico,” Hill said. “These are 18,000 feet – you don’t have to drill through salt so these are low-cost kind of development wells. As we are doing this work on Guyana, we are at a low point in the supply chain, so rigs, ancillary equipment, if we go to an early production system – all that you can develop at a much lower cost than you could say a year-and-a-half ago,” Hill said.
Late last month, ExxonMobil spudded its highly anticipated appraisal of the Liza oil discovery off Guyana.
The US supermajor had also begun seismic work on the adjacent Canje block after completing a farm-in deal.
Drillship Stena Carron has spudded the Liza-2 appraisal after sailing to ExxonMobil’s Stabroek block off Guyana from the Canary Islands, where it had been idle for more than a year.
The Liza appraisal is the first of at least four wells – split between appraisals and wildcats – planned for the 6.5-million-acre block by ExxonMobil, along with partners Hess and CNOOC Ltd subsidiary Nexen.
Earlier this month, Hill said the appraisal programme would also include a drill-stem test of Liza-2 in order to better understand reservoir characteristics such as the oil-water contact and any compartmentalisation of the reservoir.
Despite those unknowns, Hill called rock properties of the Liza reservoir “fantastic” on a conference call with investors.
In addition to the appraisal drilling, ExxonMobil will drill one or more wildcats to test additional prospects after receiving data from a 17,000-square-kilometre seismic shoot that is being completed by CGG.
“The objective there is to figure out if what we are seeing on seismic is replicable in other areas of the block, because we have a lot of lookalikes on seismic,” Hill said.
“So we want to get a well or two in a couple of the other things and see what running room we have on the block. We think there’s a lot, but obviously you’ll need some more wells to figure that out.”
In addition to the drilling work, ExxonMobil is kicking off a suite of science on its newly-expanded holdings off Guyana.
Earlier this month, ExxonMobil began meteorological and oceanographic surveys on Stabroek block as well.

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