Gulf of Mexico

Source Press
Company Elixir Energy Limited 
Tags Production/Development, Exploration, Upstream Activities
Date June 01, 2012
Gulf of Mexico

High Island Project – HIA-268 (EXR – 30% WI)

Elixir Petroleum has participated in the High Island project since the discovery of the field through the drilling of the original exploration well in January 2007. The field is located offshore the Gulf of Mexico, approximately 65 kilometres south-east of Houston. The field was discovered through the drilling of a well in January 2007 which encountered hydrocarbons in two reservoir horizons comprising the primary objectives for the well. A field development plan was approved by the joint venture and implemented immediately following the initial discovery, which saw the drilling of a second successful development well in July 2007 and the installation of a simple unmanned tripod platform and export pipeline during Q3, 2007. Following commissioning, production commenced from the two wells in September 2007. Over the course of the last four years the wells have continued to produce from the deeper of the two reservoirs encountered on each well. As reservoir pressure has depleted through production, it has become necessary to utilise artificial lift to flow the wells. During the course of the reporting period, this resulted in the gas production from well #2 being used to lift the oil production from well #1, enabling increased oil flow rates.

Each well remains capable of being recompleted on the shallower horizons which were penetrated and logged during the drilling of each well. As the new zones will be at virgin reservoir pressure, it is expected that the field will again be capable of exporting directly to sales without relying on export compression. The intention of the joint venture has been for some time to recomplete the two wells, however to receive the approval of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) to allow the temporary abandonment of the currently producing oil zone, the zone must be producing less than 50 barrels of oil per day. Although steadily declining, the oil production rate from well #1 was in excess of this threshold amount throughout the whole of the reporting period. It is anticipated that the production rate from well #1 will drop below 50 barrels a day through natural decline in the coming months. At that time, it is hoped BOEMRE approval will be obtained to undertake the workovers to re-establish higher rates of gas production from the shallower sands within each well.

In total, the field produced 120 mmscf of gas and 21,600 bbls of condensate during the reporting period and achieved an uptime of 81%. The field has delivered cumulatively 4.07 Bcf of gas and 164,000 bbls of condensate from the date of first production to the end of the reporting period. During the financial year, the average price achieved for gas sales was approximately US$4.12/mscf and for condensate was approximately US$79.07/bbl.

Pompano – Brazos Block 446-L – (EXR – 25% WI)

The Pompano field is located in shallow waters some 11km offshore from the Texas coastline. The field was originally discovered in the mid–1960’s and produced approximately 120 Bcf of gas before being shut-in in 2003. Following the evaluation of a new 3D seismic data set, Elixir elected to participate in the project with a 25% working interest. In early 2008, two development wells were drilled and quickly tied into production using the existing caissons, flowlines and processing platform that had remained in place. A third well, ATO #3, was drilled in September 2008, but it failed to find sufficient commercial hydrocarbons and was suspended to allow further evaluation.

In December 2010, the decision was made to abandon well ATO#3 in order to achieve cost savings associated with the use of work vessels in the field undertaking abandonment operations on behalf of a third party. The abandonment of the well ATO#3 was completed in January 2011.

As previously reported, the two production wells at Pompano have suffered from issues associated with sand production and bridging within the completions which has resulted in workovers of the wells being undertaken in the past. During the course of the year, sand bridging events again occurred which resulted in the minor amounts of existing production from the wells ceasing completely. In August 2011 the operator initiated workover activities on the two wells to attempt to re-establish production. Elixir elected not to participate in these activities and they understand that the efforts have not been successful in re-establishing production from the field. The company is currently awaiting the operator’s recommendation in terms of next steps with the Pompano field, but it is unlikely Elixir will elect to participate further in the Pompano Project. Production for the reporting period totalled 1,054 mmscf of gas and 935 bbls condensate (100% project). In total, the field has produced from early 2008 to the end of the reporting period 6.31 Bcf of gas and 6,435 bbls condensate. During the financial year, the average price achieved for gas sales was approximately US$3.99/mscf and for condensate was approximately US$71.65/bbl.

    Working Interest  Interest after Back In     
Name  Lease  Area (km2)  Grant Date 
 High Island   High Island Block A-268   30%   N/A   23   1-Dec-00 
 Pompano   Brazos Block 446-L, SE/4 and SW/4   25%   19.5%#   6   1-Jul-03 
 Redfish   Brazos Block 479-L, N/2 and NE/4   25%   23.6%^   3   1-Apr-08 
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