Pyramid Petroleum Inc. has received approval from the Minerals Management Service to commence the recompletion of two wells in Green Canyon Block 184 in the Gulf of Mexico. Upon completion of the A-10 and A-16D wells, Pyramid will seek approval for the recompletion of six additional wells in Green Canyon Blocks 184, 52 and 53 ("Green Canyon Blocks"). Gross production from the 8 wells is estimated to increase as much as 1,800 bopd and 2,500 mcfd with Pyramid's net increase being 450 boepd. All recompleted wells will be placed in production immediately through existing production facilities. The workover programs are expected to be completed by October 2008. Pyramid's share of the capital cost of $1.0 million will be funded from existing cash flow.
Pyramid is the operator for the Green Canyon Blocks. These platforms are located in 570 to 1,760 feet of water in the Gulf of Mexico and currently produce a gross of 2,300 bopd and 4,000 mcfd. The platform facilities on the Green Canyon blocks were designed and constructed by Conoco in 1989 with a capacity to produce 55,000 bopd and 125,000 mcfd. Produced oil is shipped through a 30-mile 12" diameter underwater pipeline in which Pyramid has an ownership interest of 19%. Gas is marketed through a third party gas pipeline. Pyramid has varying working interests ranging from 16.5% to 25% in 15,000 acres within the Green Canyon Blocks and in the platform facilities.
In addition, Pyramid announced that the exploratory drilling program of four wells announced on April 16, 2008 is now scheduled to commence in July 2008.
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