Unocal's Spirit Energy 76 sets production record at Gulf of Mexico's Vermilion 39 field
Sugar Land, Texas , Feb. 7, 2000 -- Unocal Corporation's Spirit Energy 76 unit today said that its 100 percent owned Vermilion 39 field recently set a new all-time production record.
A redevelopment program that began last year allowed production from the 50-year-old field to reach 17,500 barrels of oil equivalent per day (BOE/D) at year end. In addition, the program allowed more than 7 million barrels of oil equivalent (MMBOE) in new reserves to be added to Spirit's 1999 ledger.
The year-end rate was 10,000 BOE/D higher than when the redevelopment program began in April 1999, and production rates from the field are expected to continue to climb in the first quarter of 2000.
Vermilion 39 (VE 39) is the second-oldest field in the Gulf of Mexico and has produced more than 285 MMBOE since production began there in 1951.
"Reaching this historic milestone highlights our ability to grow the value of our legacy assets and continues our strong track record of cash flow generation at attractive rates of return," said Ken Butler, vice president of Spirit Energy's Shelf/Onshore Profit Center.
Butler said the VE 39 redevelopment program involved a complex set of projects completed in a cost effective manner without compromising environmental or safety concerns.
The redevelopment began with the creation of a geologic earth model of the major field pay sands using 3-D seismic data. The redevelopment team imported the seismic information into a reservoir simulation model and used the integrated data to asess various development scenarios. The team incorporated surface production facilities modeling into their analysis and reached an optimized plan of development.
As the redevelopment program progressed, the team also used conventional earth science and engineering analysis to assess other opportunities. In total, the VE 39 program involved drilling 6 new wells, completing workovers of 13 existing wells, modifying 6 major production facilities and performing stimulation treatments on 7 wells.
"This program represents a unique blend of high technology application and solid technical expertise," said Tim McDonald, Spirit Energy's Central Gulf Asset Manager with direct responsibility for the field. "Our success at VE 39 exemplifies Spirit Energy's ability to generate significant financial results in a short period of time from its mature assets."
Butler also noted that the increased production from VE 39 had contributed significantly to a boost in the company's 1999 production exit rate to 175,000 BOE/D. Spirit Energy's 1999 production exit rate represents an increase of roughly 20,000 BOE/D in total production during the final three months of last year, a rise of 13 percent.
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.
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. For additional information
Forward-looking statements regarding exploration and development activities and forecasted production levels in this news release are based on assumptions concerning operational, market, competitive, regulatory, environmental 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: February 2000