I don’t know if you have heard of McMoRan Exploration. If you haven’t you should look into it a little bit just to learn about its legendary leader “Jim Bob” Moffet.
Jim Bob is a legendary wildcatter. At age 70 he is still out hunting elephants while most oil companies have become much more institutionalized managers of risk. Moffet’s first big score was with MMR’s sister company Freeport McMoRan where Jim Bob helped discover the huge Grasberg Mine in Indonesia.
Now Moffet is out hunting his elephants on the Gulf of Mexico Shelf where all of the elephants were already supposedly found.
Jim Bob changed that late last year.
“The Davy Jones prospect discovery well, operated by McMoRan in 20 feet of water off the coast of Louisiana at South Marsh Island Block 230, has been logged with pipe-conveyed wireline logs to 28,530. A total of 200 net feet of hydrocarbon bearing sands has been identified in six zones of the Wilcox section of the Eocene-Paleocene.
The well, which was a re-entry of a previously abandoned wellbore, is reported to have tapped into an estimated two to six Tcfe of reserves, according to some industry analysts.
Upon confirmation via development, Davy Jones is positioned to be one of the largest discoveries on the GOM shelf in decades. The scuttlebutt in the industry is that it has the potential to open up a whole new exploration frontier in the ultra-deep (>25,000 feet) horizons on the shallow water shelf.
To date, only seven wells have been drilled to a TVD of 25,000-plus feet in this region, according to veteran geologist and explorer James R. “Jim Bob” Moffett, co-chairman of the board at McMoRan.
The outgoing, often amusingly salty-tongued Moffett long has been recognized as an expert in the onshore Miocene. Known for its prolific production in this region, the Miocene doesn’t stop at the shoreline – and go-getter Moffett saw good reason to venture out into the shallow water Gulf to explore for deep gas.
A notable result of this effort is McMoRan’s Flatrock Field at South Marsh Island Block 212, where six wells currently produce over 300 MMcfe/d gross from the Miocene, with over 55 MMcfe/d net to McMoRan.
Given the expertise Moffett has honed over the years – sometimes relying on “Jimbob-ology” along with textbook geology – and the company’s success playing the shallow water deep gas, taking on the challenge of exploring the ultra-deep horizons was a kind of no-brainer.
McMoRan’s deep gas play focuses on large structures above the salt weld, i.e. listric fault, in the deep Miocene. The ultra-deep play targets objectives below the salt weld in the Miocene and older sections that have been correlated to those productive sections seen in deepwater discoveries by other companies.”
Even though the GOM is one of the most mature provinces in the United States, both the deep gas and the ultra-deep gas plays are vastly unexplored.
According to Jim Bob
“What we think Davy Jones and Blackbeard and deep drilling have done out there is to change the whole shelf topography and redefine the subsurface geologic landscape below 20,000 feet on the Gulf shelf,” Moffett said. “No one thought we’d be sitting here with this kind of opportunity.
“One of the biggest misconceptions we have is people think the shelf and the deepwater are two different geological provinces,” he added. “They’re not geological provinces, they’re engineering provinces.
“On the shelf you have standard platforms and drill standard wells, and they have construction around and go to a common facility,” Moffett noted. “Once you get below the salt weld, it’s all one basin.”
“But the data received to date from Davy Jones and Blackbeard West confirm McMoRan’s original modeling,” he emphasized, “which correlates the objective sections on the shelf below the salt weld in the Miocene and older age sections to those productive sections in deepwater discoveries made by others.”
Davy Jones and Blackbeard likely are only the tip of the proverbial iceberg.
McMoRan is one of the largest acreage holders on the GOM shelf and onshore in the Gulf Coast area and has rights to approximately a million gross acres – including 150,000 associated with the ultra deep gas play below the salt weld.
Recently McMoRan has estimated that the various plays amount to 100 TCF of potential reserves. Not all of it is net to MMR but they hold the largest piece.
To help you estimate what something this big might be worth MMR’s recent presentation laid out some numbers:
http://100tcf.blogspot.com/search/label/Presentations
The basic numbers provided are that each 2 tcfe net to MMR is worth as follows:
At $4/mcf = $1.8 billion
At $5/mcf = $2.9 billion
At $6/mcf = $3.9 billion
So just for kicks if this turns into 10 tcfe net to MMR and natural gas averages $5/mcf in the future the value of these deep plays would be 5 x $2.9 billion = almost $15 billion. The current market cap of MMR is under $2 billion.
MMR is currently drilling a prospect at Blackbeard East. The stock price was up 7% today on seemingly no news. I must admit to being curious as to what they are finding and if some news isn’t leaking back on shore.
I don’t own MMR but maybe I should.
Jim Bob is a legendary wildcatter. At age 70 he is still out hunting elephants while most oil companies have become much more institutionalized managers of risk. Moffet’s first big score was with MMR’s sister company Freeport McMoRan where Jim Bob helped discover the huge Grasberg Mine in Indonesia.
Now Moffet is out hunting his elephants on the Gulf of Mexico Shelf where all of the elephants were already supposedly found.
Jim Bob changed that late last year.
“The Davy Jones prospect discovery well, operated by McMoRan in 20 feet of water off the coast of Louisiana at South Marsh Island Block 230, has been logged with pipe-conveyed wireline logs to 28,530. A total of 200 net feet of hydrocarbon bearing sands has been identified in six zones of the Wilcox section of the Eocene-Paleocene.
The well, which was a re-entry of a previously abandoned wellbore, is reported to have tapped into an estimated two to six Tcfe of reserves, according to some industry analysts.
Upon confirmation via development, Davy Jones is positioned to be one of the largest discoveries on the GOM shelf in decades. The scuttlebutt in the industry is that it has the potential to open up a whole new exploration frontier in the ultra-deep (>25,000 feet) horizons on the shallow water shelf.
To date, only seven wells have been drilled to a TVD of 25,000-plus feet in this region, according to veteran geologist and explorer James R. “Jim Bob” Moffett, co-chairman of the board at McMoRan.
The outgoing, often amusingly salty-tongued Moffett long has been recognized as an expert in the onshore Miocene. Known for its prolific production in this region, the Miocene doesn’t stop at the shoreline – and go-getter Moffett saw good reason to venture out into the shallow water Gulf to explore for deep gas.
A notable result of this effort is McMoRan’s Flatrock Field at South Marsh Island Block 212, where six wells currently produce over 300 MMcfe/d gross from the Miocene, with over 55 MMcfe/d net to McMoRan.
Given the expertise Moffett has honed over the years – sometimes relying on “Jimbob-ology” along with textbook geology – and the company’s success playing the shallow water deep gas, taking on the challenge of exploring the ultra-deep horizons was a kind of no-brainer.
McMoRan’s deep gas play focuses on large structures above the salt weld, i.e. listric fault, in the deep Miocene. The ultra-deep play targets objectives below the salt weld in the Miocene and older sections that have been correlated to those productive sections seen in deepwater discoveries by other companies.”
Even though the GOM is one of the most mature provinces in the United States, both the deep gas and the ultra-deep gas plays are vastly unexplored.
According to Jim Bob
“What we think Davy Jones and Blackbeard and deep drilling have done out there is to change the whole shelf topography and redefine the subsurface geologic landscape below 20,000 feet on the Gulf shelf,” Moffett said. “No one thought we’d be sitting here with this kind of opportunity.
“One of the biggest misconceptions we have is people think the shelf and the deepwater are two different geological provinces,” he added. “They’re not geological provinces, they’re engineering provinces.
“On the shelf you have standard platforms and drill standard wells, and they have construction around and go to a common facility,” Moffett noted. “Once you get below the salt weld, it’s all one basin.”
“But the data received to date from Davy Jones and Blackbeard West confirm McMoRan’s original modeling,” he emphasized, “which correlates the objective sections on the shelf below the salt weld in the Miocene and older age sections to those productive sections in deepwater discoveries made by others.”
Davy Jones and Blackbeard likely are only the tip of the proverbial iceberg.
McMoRan is one of the largest acreage holders on the GOM shelf and onshore in the Gulf Coast area and has rights to approximately a million gross acres – including 150,000 associated with the ultra deep gas play below the salt weld.
Recently McMoRan has estimated that the various plays amount to 100 TCF of potential reserves. Not all of it is net to MMR but they hold the largest piece.
To help you estimate what something this big might be worth MMR’s recent presentation laid out some numbers:
http://100tcf.blogspot.com/search/label/Presentations
The basic numbers provided are that each 2 tcfe net to MMR is worth as follows:
At $4/mcf = $1.8 billion
At $5/mcf = $2.9 billion
At $6/mcf = $3.9 billion
So just for kicks if this turns into 10 tcfe net to MMR and natural gas averages $5/mcf in the future the value of these deep plays would be 5 x $2.9 billion = almost $15 billion. The current market cap of MMR is under $2 billion.
MMR is currently drilling a prospect at Blackbeard East. The stock price was up 7% today on seemingly no news. I must admit to being curious as to what they are finding and if some news isn’t leaking back on shore.
I don’t own MMR but maybe I should.
