Unocal Drills Dry Hole at Sardinia Prospect

Unocal has concluded drilling operations on the Sardinia prospect in Keathley Canyon block 681 in the Gulf of Mexico.

The well was completed as a dry hole. Although the well reached its objectives and penetrated more than 1,100 feet of porous sandstones, some of which contained hydrocarbons, the company said the well did not find commercial quantities of hydrocarbons. The well was plugged and abandoned. Evaluation of data from the Sardinia well is continuing.

"While the results of Sardinia are disappointing, we are encouraged by the thickness of the potential reservoir encountered in the lower Tertiary in this rank wildcat," said Mike Bell, vice president for Gulf of Mexico Exploration. "We believe that the presence of this potential reservoir over 100 miles away from discoveries in Walker Ridge is a positive development for Unocal's deepwater program in the Gulf of Mexico."

The Sardinia well was drilled in 6,345 feet of water to a total depth of 27,575 feet in 60 days at an estimated gross cost of $37 million. Unocal expects to take a charge to expense in the third quarter 2004 of less than $1 million for the costs of the well. Unocal is operator and holds a 40-percent working interest in Keathley Canyon 681. Other working interest owners include Devon Energy Company (35%), TOTAL E&P USA, INC. (12.5%), and Spinnaker Exploration Company (12.5%).

Unocal plans to move the Discoverer Spirit drillship to the Sequoia prospect, located in Mississippi Canyon block 941. Unocal is operator of the Sequoia well and holds a 20-percent working interest.