The new lease, Brazos Area Block 437, is located in 60 feet of water in the Gulf of Mexico. The lease covers 5,760 acres of US federal waters and carries a five year primary term in which to establish commerciality and a perpetual term for the life of production once production is established.
Medco Energi Us owns a 100% working interest. The cost incurred by the Company for the block is US $500,000.
Brazos Area Block 437 is the fourth block purchased by Medco Energy in the Brazos Area, after the MMS awarded Block 435, 492 and 514 on October 19, 2006. The purchasing of these blocks is in line with Medco Energi's strategy to add and replace oil and gas reserves through the acquisition or exploration for hydrocarbons.
Medco Energi has proposed an aggressive drilling budget for 2007 and this block will figure prominently in the Brazos Area program. The first drilling project on this block will be initiated in the first quarter of 2007.
Rashid Mangunkusumo, the Corporate Growth Director of Medco Energi, said "Block 437 is the fifth block acquired in US during the second half of 2006. The new five blocks of Medco Energi in US demonstrates how an Indonesian company like Medco Energi has successfully marked its existence in oil and gas exploration and production activities in the USA. We are confident that all the recently acquired blocks, including the ones in Brazos Area, will contribute to the growth of Medco Energi's oil and gas reserves and production in the future."
Medco Energi has now acquired five leases in the western Gulf of Mexico during the second half of 2006. All of these blocoks are slated for drilling activity during 2007. This program continues to demonstrate our commitment to the US energy business" Said Dave Gibbs, the President Director of Medco Energi US.
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