Byron Energy has signed a drilling contract with Ensco for the Ensco 68 jack-up rig to carry out the South Marsh Island Block 71 (SM 71) drilling and completion program in the U.S. Gulf of Mexico.
Otto Energy, a partner in SM 71, said on Tuesday that the Ensco 68 rig would be available before the end of November 2017, following the installation of the tripod production facility on the lease.
Otto and Byron each hold a 50 percent working interest in the block with Byron as the operator. Otto also has a 40.625% net revenue interest.
Otto added on Monday that the 60-day contract for the rig would allow the joint venture to drill the SM 71 F2 well and then complete the SM 71 F2 and SM 71 F1 (previously referred to as SM 71 #1) wells.
The SM 71 F2 well has two targets, the B65 sand and the D5 sand. The D5 is the primary focus of the development at SM 71, and the SM 71 F2 well will provide a second production location in the D5 sand reservoir.
The initial SM 71 F1 well, drilled in 2016, logged 151 feet of true vertical thickness of oil pay in four zones. The independent reserve assessment prepared by Collarini Associates assigned a total of 2.271 million barrels equivalent net to Otto on a 2P basis, with the bulk of those reserves coming from the D5 Sand. The D5 Sand has been productive in other parts of the South Marsh Island 73 Field where over 20 million barrels of oil have been produced from multiple D5 Sand completions.
The secondary target of the SM 71 F2 well is the B65 sand which lies above the D5 sand and was stratigraphically pinched-out in the SM71 F1 well. Byron’s RTM and inversion processing indicates a positive anomaly at the B65 Sand level that is analogous to known productive reservoirs of the B65 sand.
This well will test the prospective resources and provide further calibration for those data sets as exploration progresses in the greater SM 71 area. As far as the prospective resources in the B65 sand go, Collarini assigned 2.375 million barrels of oil equivalent net to Otto. The B65 has produced 13 million barrels of oil from four trapping areas around the SM 73 field.
The SM 71 F2 well is currently programed to a depth of 2,608 meters measured depth (2,303m true vertical depth) and is expected to take less than 30 days to drill. After drilling the well, rig operations will convert to completing the SM 71 F1 and SM 71 F2 wells before the rig is released.
According to Otto, production is expected to start in late January 2018 or approximately ten days after the rig leaves location upon final hookup of production equipment.
Otto’s managing director, Matthew Allen, said: “Otto is very pleased with the progress being made by the operator at SM 71, including the securing of the Ensco 68 for the upcoming drilling program.
“The SM 71 oil development is a pivotal part of Otto’s growth strategy in the Gulf of Mexico. The project is a high margin oil field and expected to deliver between 1,500 and 2,000 bopd per well gross field production when on stream. Delivering the first production in the coming months will return Otto to the ranks of producing oil and gas companies and mark the completion of the transition in strategy that has taken place over the past three years.”
The Ensco 68 is an independent leg jack-up rig built by Marathon/Le Tourneau in 1976 and has undergone numerous equipment updates and upgrades since it was placed into service.