Houston-based Energy XXI Gulf Coast is preparing for its most active drilling program since 2014 with plans to drill six wells in the Gulf of Mexico this year.
According to the company’s statement on Tuesday, its board of directors has approved a 2018 capital expenditure budget in the range of $145 million to $175 million.
This includes funding of the company’s most active drilling program since 2014, as well as re-completions, facilities improvements, plugging and abandonment (P&A) expenditures and other capital investments.
Energy XXI’s 2018 budget includes $55 million to $65 million related to drilling six new wells, $10 million to $15 million for facility upgrades and optimization, and $8 million to $10 million for seven to nine recompletions.
As previously reported by Offshore Energy Today, the company has contracted the White Fleet’s WFD 350 jack-up rig to drill wells in the West Delta and South Timbalier areas. Drilling operations are expected to begin in late February and continue through 2018. According to information provided by VesselsValue, the rig was hired on a six-month term deal.
In addition to drilling, the company also plans to spend between $50 million and $60 million on P&A projects and between $18 million and $22 million on capitalized general and administrative costs and the balance on seismic and other.
Douglas E. Brooks, Energy XXI Gulf Coast’s Chief Executive Officer and President commented, “Improving oil prices and a review of our drilling inventory have increased our ability to initiate our most active drilling program since 2014. We are focused on moving forward with implementing our strategic plan, which includes getting back to drilling.
“We have contracted a rig that is scheduled to begin drilling our six-well program in late February that will be concentrated in our core central Gulf of Mexico region. The program includes three low-risk development locations; a water injection well to optimize production in the West Delta area; and two exploitation locations that could have a meaningful impact on production and proved reserves if successful.”