Spirit Energy 76 sees production turnaround from aggressive Gulf region exploration program
Three significant continental shelf discoveries announced
Sugar Land, Texas, Jan. 27, 1998 -Spirit Energy 76, Unocal Corporation's Lower 48 exploration and production business unit, said today that its expanded Gulf region exploration program, which focuses on replacing reserves and increasing production, will enable the unit to increase production in 1998 over the fourth quarter 1997 level.
"We expect to see our production grow at an average rate of 2-1/2 percent per quarter during 1998, compared to the fourth quarter 1997," said Jack W. Schanck, president of Spirit Energy 76. Spirit Energy 76's net production in the fourth quarter averaged an estimated 178,400 barrels per day on an oil-equivalent basis.
Last July, Schanck told security analysts that production would slightly decline through year-end 1997, but turn around in late 1997 and grow in 1998 as Spirit's new strategic plan came into play.
"Our production improvement plan is meeting our expectations for increasing production," Schanck said.
Continental Shelf Discoveries
"We have recorded a number of oil and gas discoveries both onshore and in the continental shelf area that translate directly into production gains," Schanck said, noting three new significant oil and gas discoveries in the East Breaks and West Cameron areas offshore Louisiana.
A well on West Cameron 281 block, West Cameron 280 field, encountered 54 feet of gas pay at a depth of 8,200 feet. This well is currently producing 15.4 million cubic feet per day (mmcfd). This is an extended reach well from a nearby platform on the West Cameron 280 block. Spirit Energy 76 holds a 100 percent working interest in the well and is the operator.
Another extended reach well at the East Breaks 158 field encountered a total of 146 feet (true vertical) of oil and gas pay in four zones between depths of 5,000 and 6,700 feet. This well was drilled from an existing platform on East Breaks 159. Production is expected to commence in early 1998. Spirit Energy 76 holds a 67 percent interest in the well and is the operator.
A directionally drilled exploration well at West Cameron 304/305 (prospect "Teton") encountered a total of 63 feet of gas pay (true vertical) in two zones between depths of 7,500 and 9,300 feet. It is expected that the well will be brought on production by mid-1998 at a rate in excess of 20 mmcfd. Spirit Energy 76 has a 100 percent working interest in Teton, which was acquired at the OCS central Gulf of Mexico lease sale held in March 1997.
Schanck went on to say that the Spirit Energy 76 management team is aggressively participating in lease sales, expanding exploratory activity, increasing capital spending, and actively seeking equity trades, alliances, joint ventures and acquisitions to promote production growth in its core strategic areas.
Spirit Energy 76 employs approximately 1,300 people and operates 300 offshore platforms and approximately 2,700 active wells in 355 fields in the United States.
Unocal is a leading global energy resource and project development company, with major oil and gas exploration and production activities in Asia and the U.S. Gulf of Mexico. The company maintains twin headquarters in California and Malaysia, with major offices in Singapore, Jakarta, Bangkok and Sugar Land, Texas.
Forward-looking statements regarding exploration activities, future production, drilling success and capital spending in this news release are based on assumptions concerning market, competitive, regulatory, environmental, operational and other considerations. Actual results could differ materially.
Updated: January 1998