Freeport McMoran discovers oil in Deepwater GOM

SEPTEMBER 29, 2015—Publicly traded Freeport-McMoRan reported that it discovered oil from its Horn Mountain Deep well in the Deepwater Gulf of Mexico (GOM). Initial production from the well, which will be tied back to existing facilities, is expected in first half 2017. The well, combined with two follow on development wells at Horn Mountain Deep, may be capable of producing 30,000 barrels of oil equivalents per day (BOE/d).

The well is 100 percent owned by Freeport-McMoRan Oil & Gas.

Amid these challenging times in the oil & gas market, the company’s strategy is to focus on low risk drilling and tieback opportunities such as the Hornbeck Deep well. It expects to have capital expenditures of $2.9 billion in oil and gas this year, and $2.8 billion in each of the next two years. The company says those numbers could be adjusted, depending on market conditions. Freeport McMoran, of course, also has interests in copper and gold mining.

During this month, the Horn Mountain Deep well was drilled to a total depth of about 16,925 feet. Freeport McMoran says that logging while drilling logs indicate that the well “encountered a total of about 142 net feet of Middle Miocene oil pay with excellent reservoir characteristics.” Additionally, these results indicate the presence of sand sections deeper than known pay sections in the field.

According to the company, the Horn Mountain production facilities in Freeport McMoran Oil & Gas-controlled Mississippi Canyon area are capable of processing 75 MBbls of oil per day. Freeport McMoran says that the positive results at Horn Mountain Deep and its geophysical data support “the existence of prolific Middle Miocene reservoir potential for several additional opportunities in the area, including the 100-percent-owned Sugar, Rose, Fiesta, Platinum and Peach prospects.” Freeport McMoran Oil & Gas controls rights to over 55,000 acres associated with these prospects.

Freeport McMoran Oil & Gas has been on a roll lately. Since commencing development activities in 2014 at its three 100-percent-owned production platforms in the Deepwater GOM, the company has drilled 12 wells, all with positive results. Three of these wells have been brought on production, and the company plans to complete and place the remaining additional wells on production late this year, and in 2016 and 2017.

This past July 2015, three wells drilled in the Horn Mountain—the Quebec/Victory, Kilo/Oscar  and Horn Mountain Updip—showed positive results. The wells may be capable of producing a total of over 27,000 BOE/d, with initial production expected in mid-year 2016.

Also during the third quarter of 2015, Freeport McMoran Oil & Gas drilled its second successful development well at its 100-percent-owned King field, located in Mississippi Canyon south of the 100-percent-owned Marlin facility in 5,200 feet of water. A third development well is in progress. In aggregate, these wells may be capable of producing 20,000 BOE/d, with initial production expected to commence in the fourth quarter of 2015. FM O&G’s Marlin production facilities in the Mississippi Canyon focus area are capable of processing 60 MBbls of oil per day.

Completion activities of the previously drilled three well program at the 100-percent-owned Holstein Deep field are progressing on schedule with first production expected by mid-year 2016. In aggregate, the three wells are estimated to commence production at about 24,000 BOE/d. A fourth well is being planned as part of the second phase of the Holstein Deep program. FM O&G’s Holstein production facilities in the Green Canyon focus area are capable of processing 113 MBbls of oil per day.