At South Timbalier 41, the #A-2 well has been drilled to a vertical depth of 17,300 feet (18,014 feet measured depth) and has logged 220 feet of apparent oil and natural gas pay in six intervals. All of the intervals with apparent pay are productive on the block immediately to the north, South Timbalier 26, which is also held by EPL. The Company expects that the pay in the #A-2 well will extend considerably the proved reserves on the block, particularly in the intervals initially penetrated by the #2 well drilled earlier in the year further east on the block. EPL is the operator of the well, located in 70 feet of water approximately 70 miles south of New Orleans, and holds a 60% working interest. Kerr-McGee Corporation (NYSE:KMG) holds the remaining 40%.
The South Timbalier 46 #2 well, located in 70 feet of water and 10 miles southwest of the South Timbalier 26 field, was drilled as a straight hole to a depth of 17,716 feet and encountered 50 feet of apparent natural gas pay in two intervals. Presently the Company is evaluating future exploratory wells on the block and preparing development alternatives for this discovery, which could include installation of a new platform. EPL is the operator of the well and holds a 100% working interest
The Matagorda Island 640 #1 well, which was a follow up well to a recent success on Matagorda Island 639, was drilled to a vertical depth of 8,439 feet (11,450 feet measured depth) and encountered 40 feet of apparent natural gas pay in one interval. The rig on location has since skidded over to re-enter and sidetrack the Matagorda Island 639 #1 well to test deeper intervals not reached in the initial well. The wells are located in 104 feet of water approximately 120 miles southwest of Houston, and EPL holds a 50% working interest in both wells. Vintage Petroleum Inc. (NYSE:VPI) and Cheyenne Petroleum Company each hold a 25% working interest in the wells. Development plans will be finalized once drilling on Matagorda Island 639 #1 is completed.
Richard A. Bachmann, EPL's Founder, Chairman, President, and CEO, commented, "We are very encouraged by our two most recent successes in South Timbalier 41 and 46. These two discoveries demonstrate the regional knowledge that we have developed and extended to the south and west from one of our legacy properties, South Timbalier 26. The #A-2 well on South Timbalier 41 is our third exploratory well on the block, and it significantly exceeded our expectations. We expect to drill at least one more exploratory well on the block this year. In the western Gulf of Mexico, our success at Matagorda Island 640 confirms yet another new multi-well field discovery, and we still have additional drilling to look forward to in the area. These latest discoveries bring us to 13 successes of 17 wells drilled so far in 2004, and we are still on track to drill a total of 32 exploratory wells by year end."
EPL is participating in rig operations at four additional locations: South Marsh Island 192, Eugene Island 277, Vermilion 73, and South Marsh Island 109. At South Marsh Island 192, Eugene Island 277 and Vermilion 73, exploratory tests are underway with results expected before the end of the year. At South Marsh Island 109, a new platform is in place and the operator is currently completing three exploratory successes from 2003. Subsequent to the completions, the operator will drill two more exploratory wells, the #A-4 and #A-5.
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