Pioneer Strikes Twice in the Gulf of Mexico
Pioneer Natural Resources Company announced an oil discovery on the Ozona Deep prospect in the deepwater Gulf of Mexico and a successful appraisal well on the Stirrup discovery on the Gulf of Mexico shelf. The Ozona Deep discovery well was drilled in 3,280 feet of water in Garden Banks block 515 to a measured depth of 26,352 feet and encountered approximately 345 feet of net oil pay in two primary intervals. The well was logged, fluid samples were taken for analysis, and the well will be temporarily suspended without further testing. Appraisal plans for 2002 will be finalized following the analysis of the data gathered in the discovery well. Pioneer has a 32% working interest in the well and Marathon Oil Company (NYSE:MRO) has a 68% working interest and is operator.
Scott D. Sheffield, Chairman and CEO, stated, "Ozona Deep has the potential to become Pioneer's fifth major project to add significant future production, the fourth in the deepwater Gulf of Mexico. We have participated in 17 deepwater wells during the last three years, 13 of which have been successful. In mid-2002, we expect to begin to see the impact of this success when the Canyon Express system comes onstream, followed by new production from Devils Tower and Falcon in early 2003."
The Stirrup No. 2 appraisal well (Mustang Island block 861), the initial test of a second large fault block on the Stirrup structure, found three productive sequences in the middle Frio formation. The well was drilled to a measured depth of 18,091 feet and production casing has been run and cemented. The discovery well was announced in July and temporarily suspended pending fabrication of facilities which is underway. First production is expected in April, 2002. The Stirrup No. 2 well has been temporarily suspended, and the third exploratory well is currently drilling to test a large structural ridge immediately adjacent to the two productive fault blocks tested to date. Pioneer has a 25% WI in the 5,600-acre unit that includes the Stirrup field.
Pioneer also announced that the well drilled on the Malta prospect on the Gulf of Mexico shelf encountered wet sands and will be plugged and abandoned. Considering the net effect of these results, Pioneer updated its outlook for fourth quarter 2001 exploration and abandonment expenses to a range of $20 million to $30 million.