I worked for Vastar in the Deepwater group in 1996 when the first well was drilled on the Mirage prospect, which now is known as Telemark. The geology pre-drill, was complex and the seismic in-conclusive, yet still it garnered the highest bid at the lease sale that year, over $11MM. Vastar wanted a partner to help drill the initial exploratory well due to the high well and development costs. We persuaded Unocal to participate by paying 2/3 of the cost of the first two wells in order to earn a 1/3 interest in the prospect. This was, and is, an exrodinarily high promote, but one that Unocal and other major oil companies were willing to pay. Mirage was simply viewed at the time, as the best deepwater prospect in the GOM.
Upon reaching total depth, the objective formation that looked so promising on seismic turned out to be a volcanic ash bed which had been laid down millions of years ago and mimicked the signature of a hydrocarbon reservoir. We found oil and gas in other formations, but not nearly the qualities that had justified drilling of the well. Since then, every well drilled on the prospect has shown that the seismic simply does not allow for the clear delineation of the faults and the reservoirs. Until this problem is solved, Mirage/Telemark will be a pit into which a lot of money is thrown. |
