The deep water play in the Gulf of Mexico -- the hot exploration province for the last decade -- just keeps getting deeper and hotter.
A recent rash of discoveries in 5,000 to 6,000 feet of water are not only creating a buzz in the industry, they likely will be the impetus the industry needs to make that next giant leap out into the Gulf.
Recently BP-Amoco announced four major new discoveries, two of which are in over 6,000 feet of water.
The most important of these new finds is Crazy Horse on Mississippi Canyon block 778 and surrounding blocks in the Boarshead Basin 125 miles southeast of New Orleans. The new field has estimated resources of at least one billion barrels of oil equivalent -- the largest discovery ever in the Gulf deep water, according to the company.
BP-Amoco is the operator and holds a 75 percent interest in the prospect, -- and Mobil holds the remaining 25 percent equity.
BP-Amoco amassed the acreage covering the enormous Crazy Horse structure over several years. Last December it spud the discovery well, which reached a total depth of 25,000 feet in June.
The company at this time is reluctant to give out too much information about the discovery, but Steve Peacock, vice president of exploration for BP-Amoco, did say the Mississippi Canyon area in general is attractive because the sedimentary section is relatively complete, is relatively shallower here, and generally the salt tectonics are less complex than in the western Gulf.
A Ph.D. thesis by Shengyu Wu at Rice University indicates that the Crazy Horse structure is on the northern edge of a very large southward dipping counter regional salt system.
Based on data from the overall area, the reservoirs are most likely Miocene in age, similar to the giant Mars and Ursa oil fields to the west and the Mensa gas field to the northwest.
BP-Amoco will learn more about its new giant with an appraisal well scheduled to spud in the fourth quarter.
Mad Dog
In addition to Crazy Horse, BP-Amoco made a discovery at the Mad Dog prospect on Green Canyon block 826 in 6,600 feet of water.
The well was spud in May 1998 and was drilled to a total depth of 22,410 feet. BP-Amoco is the operator and holds a 64 percent working interest, while Unocal Corp.'s Spirit Energy 76 Unit has a 25 percent interest and BHP holds the remaining 11 percent.
In April, Spirit announced that the Mad Dog well encountered 300 net feet of hydrocarbons and, based on the available data, the firm believes its net resource potential is likely in excess of 100 million barrels of oil equivalent (boe), and possibly as high as 200 million boe.
Although further appraisal drilling is required to determine the extent of the discovery, Spirit Energy believes the gross resource potential within the drilling unit to be in excess of 400 million barrels of oil equivalent, and possibly as high as 800 million boe.
BP-Amoco's Peacock said the firm plans to drill an appraisal well at Mad Dog later this year.
David A. Johnson, Spirit Energy's vice president for exploration, said the well likely represents the "trend opening" discovery for the Eastern Fold Belt and Salt Canopy play that the company was betting on when it acquired a considerable deep water acreage position in last year's Lease Sale 171.
Unocal's deep water holdings contain several other major prospects and leads in this trend that have geological characteristics similar to Mad Dog.
Each company may have a different name for this "trend" because exploration in the play is so recent, said Mike Bell, vice president of deep water for Spirit.
In addition to Mad Dog, BP-Amoco announced discoveries at Atlantis on Green Canyon 699 and Holstein on Green Canyon 644 -- and all are in this emerging new area.
Geological Background
The "trend" tapped by the Mad Dog and Atlantis discoveries is referred to as the Mississippi fan fold belt in much of the geologic literature. A 1992 paper published in the AAPG BULLETIN outlined the structural geology and evolution of the fold belt.
The Mississippi fan fold belt, located in the deep Gulf of Mexico beneath the upper and middle Mississippi Fan, is characterized mainly by basinward-verging anticlines and associated thrust faults, according to authors Paul Weimer with the University of Colorado and Richard T. Buffler with the University of Texas at Austin. The fold belt extends about 300 kilometers eastward and is approximately 50 kilometers wide. These discoveries occur in the western portion of the fold belt, where shallow salt tongues have flown over some of the folds, making seismic imaging difficult.
Based on correlations with deep Gulf of Mexico seismic sequences, the folded strata are interpreted to be Upper Jurassic through Miocene. Salt tongues or sheets in the lower slope have over-ridden and partly masked parts of the fold belt.
The approximate minimum age of the folded strata suggests that the major deformation took place mainly during the middle to late Miocene.
South of the fold belt, strata downlap onto a major middle Miocene surface at the top of the Middle Mexican Ridges sequence in the deep basin. This downlap represents sediment derived locally from the growing anticlines and marks the beginning of growth of the fold belt, Weimer and Buffler noted.
Onlap of younger upper Miocene and lower Pleistocene Mississippi fan strata onto the anticlines indicates that the fold belt formed major topographic barriers after its formation and influenced the distribution of early fan sediment.
The structurally highest folds have experienced at least several hundred meters of truncation by deep-marine erosion.
In the northern and eastern part of the fold belt, according to the authors, the entire Upper Jurassic to Lower Cretaceous Challenger sequence has been deformed with 2,000 to 3,000 meters of structural relief. This uplift involves a structural thickening of stratigraphic section in the core of the anticlines, suggesting that the structures are cored with mobilized salt.
Some of the younger fan sequences locally decrease in thickness across the folds, which indicates recurrent movement and growth of the salt in the core of the folds throughout the Pleistocene. In some places, salt has remobilized and completely penetrated the overlying fan sediments to the surface, forming diapirs.
Weimer and Buffler's studies show basement rocks were not involved in the deformation. Thrust faults beneath the folds sole out into the lower part of the Mesozoic section, probably into Middle Jurassic salt. The folds and thrust faults are most likely the result of compressive stresses caused by updip sediment loading during the development of Miocene shallow-water and slope depocenters to the north.
The location of the fold belt is controlled by where the original Louann salt pinches out. Reservoirs are early Miocene in age, indicating that they were deposited prior to fold belt formation.
Technology's Impact
Proving up ultra-deep plays like the Mississippi fan fold belt in the Gulf of Mexico -- like so many other exploration concepts -- has been the result of technological breakthroughs, particularly in 3-D seismic.
Much of the region is covered by salt, which traditionally makes seismic imaging dicey. However, seismic contractors have made great strides in recent years in this arena.
"The algorithms are getting better, the mathematical way to deal with the ray path distortion and energy attenuation that salt causes," Peacock said.
"Also, the industry is learning the best techniques to apply to these salt bodies, so it's been a combination of improved technology and just moving up the learning curve -- the more you do the more you understand."
The improved technology has been in the arena of 3-D pre-stacked depth migration, according to Spirit's Bell.
"The sub-salt play on the Gulf of Mexico shelf that has developed over the last several years has pushed this technology," he said. "Over time, simple refinements and lowering the cost of compute time has allowed contractors to implement pre-stacked depth migration -- not just in two dimensions, but now in three dimensions.
"Researchers have known the code for this technique for years, but the question has been how do you get enough data in front of those equations and run them through programs in a workable manner," he continued.
"The initial attempts would occupy Crays for months. Today we can process these 3-D pre-stacked depth migrated images in days and weeks -- and the cost has fallen dramatically."
Good News for All
The excitement surrounding the Crazy Horse and Mad Dog discoveries for the industry in general is that these large fields will open up a whole new corridor in the ultra-deep water of the Gulf in regions like the Mississippi fan fold belt.
"These discoveries will certainly lead to more exploration and development in this corridor of deep water," Peacock said, "(and) they will also open up more provinces around the world.
"As we and other companies prove we can safely and profitably operate developments at these water depths, it will open up other prospective basins globally that have water depths out to 6,000 feet," he continued, "like parts of West Africa and new areas of offshore Brazil."
There are no development hubs in this ultra-deep water region, and that's why discoveries like Crazy Horse are so critical.
"This deeper corridor will likely mirror development in the 2,000- to 5,000-foot band, where a few transport hubs at large fields like Auger, Hoover-Diana, Ram-Powell and a few others are connections for other fields," said Spirit's Bell.
"This ultra-deep water play will likely be developed in this same basic way, with a few outposts tying the region together."
Peacock said it's too early to make any determinations on whether Crazy Horse and other enormous ultra-deep water discoveries will be tied into the existing infrastructure in 2,000 to 5,000 feet of water, or if whole new corridors of infrastructure will be built out to these giants.
Either way, he added, it's a boon for the industry working out in the farthest reaches of the Gulf.
More to Come
Although it's also too early to talk about specific development plans for Crazy Horse or Mad Dog, Peacock said the water depths are definitely prohibitive for a fixed platform.
"These water depths are probably too deep for a tension leg platform as well," he added, "so we are almost certainly going to be looking at some variation on a floating spar system."
The one thing that is a sure bet is that a growing legion of companies will be hunting for more elephants in the ultra-deep waters of the Gulf. A significant number of drillships rated for 10,000 feet of water will be coming into service in the next 18 months, Bell said, and this will certainly boost the activity level in the ultra-deep water.
BP-Amoco, which has 750 gross blocks under lease in water depths of 1,500 feet or more, obviously still has a great deal of work to do. The company will continue its exploration program while evaluating the rash of discoveries they have made in the last year.
But, Peacock added, this is just the tip of the iceberg for the industry.
"There are a great many accumulations left to be found in the deep water, and certainly in the ultra-deep water, which is just beginning to be explored," he said. "We only have to compare the deep water's history to date to the shelf. We are still in the very early days of deep water exploration.
"Even though the industry has enjoyed a tremendous amount of success so far, we think there is plenty more out there."