Unocal's Spirit Energy 76 is high bidder on 15 offshore blocks in MMS western Gulf of Mexico lease sale
Sugar Land, Texas, Aug. 26, 1999 -- Unocal's Corporation's Spirit Energy 76 unit said it was the apparent successful high bidder for interests in 15 lease blocks in the western Gulf of Mexico, including 7 deepwater blocks and 8 shelf blocks, in Tuesday's western Gulf of Mexico OCS Lease Sale No. 174.
Spirit Energy had apparent high bids amounting to $8.8 million. Total industry high bids in the sale are estimated by the U.S. Minerals Management Service (MMS) at $94.7 million.
"In the deepwater, we were the high bidder on 7 high-quality Keathley Canyon blocks that are on trend with recent discoveries made by Spirit and other companies," said John T. Donohue, president of Spirit Energy. "In addition, we were successful bidder on 8 blocks on the Gulf of Mexico shelf, which is one of Spirit's key production areas."
The acquisition of these new blocks would increase Spirit's Gulf of Mexico exploratory portfolio to more than 300 blocks. Of that, nearly 220 are located in deep water; 85 are on the shelf. All bids are subject to review by the MMS, which conducted the sale.
Spirit Energy is currently participating in the drilling of two deepwater exploration prospects -- K2, operated by Conoco on Green Canyon 562, and Sumatra on Garden Banks 941 -- in the Gulf of Mexico. Spirit expects to follow-up the Sumatra well with an appraisal of the earlier McKinley discovery by Texaco on Green Canyon 416 in September.
"We have a significant portfolio of sizeable prospects in the deepwater foldbelt, which are on trend with recent discoveries, that we can start exploring next year when we receive our new drill ship," Donohue said.
Donohue noted that Spirit has a long record of low drilling and operating costs on the shelf, which enables the company to enjoy returns that cannot be matched by the typical shelf operator and offset production declines. "With the addition of these 8 new blocks, we are able to further leverage our exploration, drilling and operating expertise across a larger asset base," he said.
The Gulf of Mexico deepwater and shelf (including the Mobile area) are two key operating areas for Spirit Energy. The company is also focused on the onshore GOM area and the Permian Basin in West Texas.
Spirit Energy 76, Unocal'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 about future exploration and development activities in this news release are based on assumptions concerning geological, market, competitive, regulatory, environmental, operational and other considerations. Actual results could differ materially as a result of factors discussed in Unocal Corporation's 1998 Form 10-K report filed with the Securities and Exchange Commission.
Updated: August 1999