Santos
Group expands US exploration portfolio
Posted: 03 June 2004
Santos Limited today announced a significant expansion and diversification
of the Group’s USA exploration acreage and prospect inventory
— primarily with the addition of two new venture areas.
The new areas are in the shallow waters of the Gulf of Mexico,
where winning lease bids have now all been formally awarded, and
onshore East Texas.
Exploration drilling is scheduled for both areas in the second
half of the current calendar year.
Santos said today that its wholly-owned
subsidiary, Santos USA Corp. (SUSAC), had acquired, through competitive
bid, 7,800 hectares
(over 19,000 acres) in shallow State of Texas waters in the Gulf
of Mexico.
These awards - securing 100 per cent interests in 31 of 32 parcels - have
been achieved by submitting winning bids in three sales conducted
by the State of Texas General Land Office in the past nine months.
Continuing its focus on high-impact deep gas plays, the Group
is primarily targeting exploration objectives in the Lower Frio
and Upper Vicksburg sands.
These sands have been highly productive in the onshore Texas Gulf
Coast region. Water depths range from 8 to 12 metres (27 to 39
feet).
The Santos Group has also assembled leases covering 2,200 hectares
(over 5,500 net acres) onshore East Texas, where the Group is targeting
the Cretaceous-age Eagle Ford sands in an emerging play area that
is on trend with recent gas discoveries and current drilling activity.
Gas prices continue to remain strong in the US, with the Henry
Hub spot price in excess of US$6 per gigajoule.
Santos Group’s
US Drilling Successes
In addition to the expanding exploration activity, Santos said
the Group is also participating in a significant field delineation
and development program in the Frio trend of South Texas:
- Petru 1 (Santos Group 37.5 per cent working interest (WI) before
payout; 34.4 per cent WI after payout) was completed in December 2003.
It is flowing
approximately 13 million cubic feet per day (mmcfd) of gas
and has already produced 1.75 billion cubic feet (BCF) and nearly
38
thousand barrels of condensate (MBC).
- Petru 2 (Santos Group
34.4 per cent WI) was connected to sales in March 2004 and is currently
producing more than 4 mmcfd.
- Petru 3 (Santos Group 34.4 per cent WI) was
spudded in mid-March and is being completed in the primary
reservoir.
These are offset locations to the Henderson 1 new field discovery
(Santos Group 25 per cent WI), which was completed in late 2001 and has
to date produced over 2.7 BCF and 11 MBC to date.
The Santos Group is participating (with 25 per cent WI) in an offset Henderson
3 well, which spudded in mid-April.
Additional drilling in the field is being evaluated for later
this year to further develop the primary reservoir and test deeper
objectives in the area.
The Group is also completing its scheduled 2004 Wilcox drilling
campaign.
The Remmers 8 development well (Santos Group 69 per cent WI) has been
successfully fracture stimulated in three zones and is currently
expected to produce approximately 2 mmcfd of gas when it is re-connected
to sales this week.
The Hamman & Anderson 7 development well (Santos Group 55 per cent
WI) has recently been cased for completion as a gas well from its
primary objective.
The main focus of the Group’s 2004 operated drilling program
in the US will now shift to the deep Frio, along the upper Texas
Gulf Coast, where Santos has established a competitive advantage
in the Matagorda and Brazoria Counties.
The Group has an inventory of more than 15 high-impact exploration
prospects.
Santos Limited is a major Australian oil and gas exploration and
production company with interests in all Australian hydrocarbon
provinces.
The Santos Group also operates in the USA, Indonesia and PNG.
For more information see www.santos.com
Posted by Richard Price,
Editor Pipeline Magazine
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