Spirit Energy 76 lease sale results enhance existing Gulf of Mexico portfolio
Sugar Land, Texas, March 17, 1999 -- Spirit Energy 76, Unocal Corporation's U.S. Lower 48 exploration and production unit, today said that it is the apparent high bidder for interests in two Gulf of Mexico deepwater and five shelf blocks in the OCS Lease Sale No. 172 conducted today by the U.S. Minerals Management Service (MMS).
Spirit was the apparent high bidder on two out of three deepwater tracts, and on five of seven shelf blocks. The company exposed a net total of $11.8 million, with apparent high bids amounting to $10.8 million. Total industry high bids in the sale are estimated by the MMS at $171.6 million.
"We had already established a significant exploration portfolio going into this sale, which allowed us to pursue a highly selective bid strategy," said John T. Donohue, president of Spirit Energy 76. "We focused on certain blocks that would enhance our existing Gulf of Mexico leaseholdings."
David A. Johnson, vice president of exploration for Spirit, added, "We were pleased to pick up several high quality, near-term drillable blocks on the Shelf, including a key prospect in Mobile Bay just south of our recent discovery on block 918.
"In the deepwater, we pursued a very focused approach and picked up two large, high quality prospects that are on trend with recent discoveries made by other companies," Johnson said.
The company said it intends to exercise back-in rights to participate in Mississippi Canyon block 897, immediately to the north of the Mirage discovery announced earlier today by Spirit Energy 76 and Vastar Resources, Inc.
Prior to the sale, Spirit Energy had an exploratory portfolio of 292 blocks. The sale and back-in option will bring Spirit's Gulf of Mexico exploratory portfolio to a total of 300 blocks, if all bids are approved by the MMS. Of that total, 216 are located in deepwater; 84 are on the shelf.
In the Gulf of Mexico this year, Spirit expects to drill four to six exploration wells on deepwater prospects, along with another 30 prospects on the shelf.
Spirit Energy 76, Unocal Corporation's U.S. Lower 48 exploration and production unit, has major operations onshore in Texas and Louisiana and on the Gulf of Mexico shelf, in addition to a significant presence in the Gulf of Mexico deepwater.
Unocal is one of the world's largest independent oil and gas exploration and production companies, with resource development, power plant and pipeline projects in Asia, the U.S. Gulf of Mexico region and Latin America.
Forward-looking statements regarding exploration activities, in this news release are based on assumptions concerning market, competitive, regulatory, environmental, operational and other considerations. Actual results could differ materially.
Updated: March 1999