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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Ken Robbins who wrote (48207)	7/20/1999 2:58:00 PM
From: upanddown	Respond to of 95453

Ken It could be that Mavis should have referred to RIG as responsible for a faster drilling rate but I did find this on the Unocal site. They claim all the credit for faster deepwater drilling and attribute it to techniques/procedures they developed in Pacific Rim projects. Doesn't sound like anything patentable that couldn't be copied. The reason I think it is important is that it appears that GOM deepwater drilling is being deferred because of cost concerns. The big operators are holding several thousand blocks in the deep water but my best guess is maybe 20-30 projects actively drilling in deep water with maybe a half dozen going in the ultra deep. Any improvement in drilling costs might expedite deferred projects. John Deepwater Gulf of Mexico exploration The company said that the first three deepwater exploration wells it operated in the Gulf of Mexico were drilled in and average 47-percent less time than comparable wells. "We are well on our way to delivering the lower drilling costs we committed to when we launched this program," Beach said. The Nag el Madamud well in Mississippi Canyon block 541 was drilled at a rate of 331 feet per day, or 35 percent faster than comparable deepwater exploration wells in the Mississippi Canyon area. The well reached its final objective in 22 days. Drilled in 2,016 feet of water to a total depth of 8,891 feet, the well was deemed non-commercial. Unocal has a 50-percent working interest in the prospect. Approximately $6 million in well costs will be charged against the company's second quarter 1999 earnings. The Bowshock well in Garden Banks block 460 was drilled at a rate of 415 feet per day, or 39 percent less time than comparable deepwater exploration wells in the Garden Banks area. The well reached its final objective in 44 days. Drilled in 2,500 feet of water to a total depth of 17,014 feet, the well was a dry hole. Unocal has a 100-percent working interest in the prospect. Approximately $17 million in well costs will be charged against the company's second quarter 1999 earnings. An additional $2 million will be charged in the third quarter. The previously announced South Sierra well was drilled in 57 percent less time than comparable wells. The company attributes the lower costs to its program to enhance the value of its deepwater portfolio through use of techniques and procedures proven in Unocal's Indonesia and Thailand operations. Beach said that although the hydrocarbon results at Nag and Bowshock were disappointing, he continues to be encouraged by the industry-leading drilling cost performance achieved on the wells and has high expectations for success on other prospects scheduled for exploration drilling.