Energy Partners, Ltd. announced that an exploitation well drilled in its 100% owned East Bay field, located in its Eastern core area on the Gulf of Mexico Shelf (Shelf), has uncovered bypassed oil potential that exceeded its pre-drill expectations. The Company provided further comments on the implications of this encouraging result for the East Bay field, upcoming drilling activity, and other operational steps being undertaken in this core field.
The exploitation well is the first of several operations planned for the rig in the East Bay field. The well, a development sidetrack located in one of the main fault blocks in the field, has found bypassed oil, penetrating 7 hydrocarbon bearing sands for a total of 120 feet of apparent high quality oil pay. The well is currently being completed and is expected to be on line early in the second quarter with an expected initial gross production rate of 400 to 800 barrels of oil per day. EPL holds a 100% working interest in the primary producing areas of this field.
The results of the Company's first infill drilling targeting bypassed oil in the East Bay field encourages the Company to look for additional opportunities of this type in the field, with a study underway to develop more locations. EPL sees at least one more location in this current fault block, with numerous other fault blocks containing multiple oil bearing sands to study in the coming months. The Company also plans to test a similar concept identified last year in a nearby fault block believed to contain bypassed oil. This test will be conducted through the drilling of its first well in a pilot horizontal drilling program scheduled to begin following the completion of the sidetrack well.
The East Bay field is located 89 miles southeast of New Orleans near the mouth of the Mississippi River and contains producing wells located along the coastline and in water depths ranging up to approximately 85 feet in both state and federal waters. The Company holds approximately 51 square miles of acreage in this large field that has produced over 660 million barrels of oil and 1.6 trillion cubic feet of gas from over 100 producing horizons since its discovery nearly 60 years ago.
Since the EPL's acquisition of the field in 2000, it had been pursuing mainly gas opportunities in the field in its development and exploration activities. While the Company continues to pursue exploration and exploitation opportunities for gas in the field, it has also recently brought a renewed focus on enhancing the field's oil production. EPL also recognizes that there exists the potential benefit of also adding new oil reserves through future production performance.
Stephen D. Longon, Senior Vice President of Drilling, Engineering and Production, commented, "This is exciting news for this 100% owned core property. We are looking at this field with a renewed focus and have developed a three-pronged strategy to unlock this field's potential. This strategy includes enhancing oil production in the field through infill drilling and other techniques, increasing the profitability of the field through reductions in the field's lease operating and drilling costs, and finally, decreasing the maintenance requirements of the field through an active plugging and abandonment program.
"Regarding the announcement today of our finding bypassed oil in the heart of this prolific field, we are encouraged more than ever that we are looking at a possible rejuvenation of this field. I'm excited about what our technical staff is uncovering as they apply what they have learned from this well. Additionally, if our study results in a number of drilling locations, we believe we will be able to drive down our drilling costs per well through efficiencies we expect to gain. We are also embarking on a technique called microbial enhanced oil recovery, whereby anaerobic bacteria are being injected into several of our existing low rate oil completions in an attempt to improve production rates. While this test program is experimental, it is a very cost effective approach to enhanced oil recovery and would be another innovative step forward for our East Bay field."
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