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Dynamics of Fossil Fuel Movement

General discussions of the systemic, societal and civilisational effects of depletion.

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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Fri 07 Jul 2017, 17:25:40

As good a spot for this update as any. Obviously not directly related to PO. But certainly just one more element of the bigger picture of the POD:

The govt announced a lower royalty for new GOM leases. For !eases in 200 m water depth and less: was 18.75% reducing to 12.5%. Certainly in part due to lower oil prices. But the GOM above 600' (which pushes out to the edge of the shelf north of where the Deep Water plays begin) is a very mature trend. Completely shot with 3d seismic multiple times.

But some companies have been trying to develop a very deep play below 28,000' in shallow water close to the shoreline. Some huge IN PLACE reserves have been reported. But much of them may remain in place: the pressures and, in particular, the temperatures are so high the completion technology is right at the limit. A company spent over $220 million on its first well in the trend and eventually plugged it as unproducible. Not sure if the lower royalty combined with relatively low NG prince's is going to build enough enthusiasm.
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Re: Dynamics of Fossil Fuel Movement

Unread postby rockdoc123 » Fri 07 Jul 2017, 17:40:23

Is the deep play still in the Tertiary wedge (Miocene)? I realize that most of the drilling has been post salt or on the flanks of diapirs but I expect this is sub-salt? New seismic imaging seems to be detailing that area much better than in the past. I do remember a few years back a company named McMoran drilled an ultra-deep well (+20,0000") but don't remember the results.
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Re: Dynamics of Fossil Fuel Movement

Unread postby sparky » Fri 07 Jul 2017, 18:39:41

.
Is Miocene a bit on the young side ?
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Re: Dynamics of Fossil Fuel Movement

Unread postby rockdoc123 » Fri 07 Jul 2017, 21:05:56

No. I think the idea is that the Miocene sands that produce in deep water will also be attractive on the shelf. But contrary to what you might normally believe the drilling depth will be deeper simply because it has all the overburden that the offshore doesn't. Simplification for sure. I don't know what they are chasing but I have not heard of any possible targets in the Eocene or the Late Cretaceous zones in shallow water, but then again I haven't been keeping up with what is going on. Rockman is basically a Texican/Coonass so I suspect he has a better idea.
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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Sat 08 Jul 2017, 21:32:23

The lead off batter in that play was McMoRan trying to develop the Davy Jones Field. Here's an update from 2013 frtom Forbes:

"We got an interesting update this week from McMoRan Exploration, America's ballsiest oil and gas explorer, on the status of the ultradeep wells it has drilled in the shallow waters of the Gulf of Mexico. Led by legendary geologist Jim Bob Moffett, McMoRan said in its new quarterly report that it has sunk a total of $1.2 billion to drill six behemoth wells, including Davy Jones, Blackbeard and Lafitte.

Moffett, as we've written before, is going after deeper reservoirs of natural gas than anyone has before -- more than 30,000 feet below sea level. McMoRan's exploration wells have indeed found bountiful quantities of hydrocarbons. But the trouble now is figuring out how to complete and produce these wells.

Davy Jones is perhaps the most watched well in the entire U.S. oil and gas industry right now. McMoRan has drilled two wells into the Davy Jones structure, discovering high-quality sandstone reservoirs of more than 300 feet thick and filled with natural gas. The reservoirs have been proven to stretch more than 2 miles across between the two Davy Jones wells."

https://www.forbes.com/sites/christophe ... 0fab52a92c

And from Dec 2015:

"Freeport-McMoRan Inc. co-founder James “Jim Bob” Moffett’s last big gamble as head of the world’s largest copper miner was a $1.2 billion wrong-way bet six miles beneath the Louisiana coastline.
Bloomberg reports Moffett, a legendary wildcatter and geologist whose credits include the gigantic Grasberg copper deposit in Indonesia, is stepping down as chairman and director at Freeport as the minerals, oil and gas producer turns to cutbacks and cash preservation amid a deepening commodities meltdown.

The 77-year-old Moffett in 2007 staked much of the company’s future on an obscure cluster of gas-soaked rocks, hidden beneath coastal Louisiana oil fields, that had been discarded by bigger operators including Exxon Mobil Corp. After seven years of drilling, Freeport in January suspended work on fields with names like Davy Jones and Blackbeard."

https://www.businessreport.com/article/ ... t-freeport

And the latest news I could find. From Jan 2016:

"PEOPLE call us pioneers. Well...some people say pioneers end up with arrows in their back.” So James “Jim Bob” Moffett, one of the great wildcatters of the past half-century, presaged his fate in 2012. On December 28th Freeport-McMoRan, the firm he founded and built into a global mining and oil giant, said he was stepping aside as executive chairman.

He seems to be the latest casualty of the “Icahn effect”, the toppling of larger-than-life entrepreneurs of the commodities boom after Carl Icahn, a veteran activist investor, buys stakes in their firms and seeks to shift their focus to cost-cutting. Though Mr Moffett, a geologist, found one of the world’s largest copper and gold mines, Grasberg, in the mountains of Indonesia, in 1988, his costly pursuit of the appropriately named Davy Jones gasfield in the Gulf of Mexico, as well as controversial takeovers, upset many shareholders. So did a 70% drop in Freeport’s share price during 2015"

https://www.economist.com/news/business ... n-you-cant
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