DNR Secretary Angelle Reports Record-Breaking South Louisiana Wells

01 13, 2012 by Louisiana Department of Natural Resources

Louisiana Department of Natural Resources (DNR) Secretary Scott Angelle said today Cameron parish is the current focal point for a new frontier in domestic energy exploration, as operators proceed with two onshore drilling projects in the parish targeting inland depths not permitted before in the state.

One of those exploration wells, in the Johnson’s Bayou area in western Cameron parish, has been drilling for more than a year and has reached 25,500 feet – deeper than any previous well in the state. No well on record has produced at a depth below surface of 24,000 or deeper.

One of the partners in the Johnson’s Bayou well project, Stone Energy, has announced that the partnership is working to obtain additional equipment to reach the targeted depth of 26,000 feet, and drill even deeper. The other major partner in the Johnson’s Bayou Project is Chevron.

Chevron is also the operator of another record-depth project on the eastern side of Cameron parish, where the company brought the largest land rig in the world, owned by the Unit Drilling Co. of Oklahoma, down from Wyoming to Louisiana and has begun drilling its 29,000-foot Lineham Creek well project.

The state Office of Conservation granted Chevron a permit in October to operate the Lineham Creek well. To get the job done, Chevron contracted the 200-foot-tall Rig No. 201 – a rig with a 40,000-foot design capability, which the U.S. Secretary of Energy personally traveled to Oklahoma to dedicate when it was built in 1981. The entire rig required more than 100 semi-truck loads to ship it to Louisiana, and once assembled, the drill floor alone is more than 40 feet off the ground.

“We may be seeing the opening of yet another new chapter in the ongoing story of Louisiana’s long and distinguished history of providing the energy that fuels this nation. Drilling wells to these kinds of depths is a major undertaking in terms of time and capital investment,” Angelle said. “Simply making the decision to move forward with this kind of project and see it through is a vote of confidence by the industry in energy potential and economic future of this state. It is especially encouraging when you see Louisiana’s deep natural gas potential has attracted interest from a deepwater giant such as Chevron, a company that can drill anywhere on the globe.”

Angelle also noted that the Chevron 29,000-foot project is a prime example of how the state can balance the needs of energy production, economic development and environmental protection. The project is sited within the Rockefeller Wildlife Refuge, which is managed by the Louisiana Department of Wildlife and Fisheries (LDWF).

The Rockefeller Foundation donated the refuge to the state in 1919, and the terms of the original deed anticipated that development of mineral resources within the refuge could help support the state’s efforts to maintain it. The deed also placed stipulations on the state’s management of the area that included a requirement that any mineral revenue from activity within the refuge must first go to pay the costs of maintaining the refuge.

The particular area of the refuge where the Chevron well site is located was part of the March 2010 lease sale held by the State Mineral and Energy Board. LDWF set specific requirements in the lease terms on compliance with refuge regulations, handling of spoil from any necessary dredging and maintaining a closed loop on any fluids produced from a well.

“The habitat preserved within the Rockefeller property has supported numerous fish and wildlife species for many years and will continue to do so,” said LDWF Secretary Robert Barham. “The Rockefeller Foundation’s foresight, allowing the department to utilize mineral resources for continued management of that habitat, will ensure its value as a natural resource well into the future.”

DNR’s Office of Coastal Management also assessed the project’s potential impact on coastal wetlands as part of the Coastal Use Permit process, and performed a geologic review to ensure the surface location chosen by the operator for the well project was the most logical in light of its intended purpose. The OCM assessment noted the project as having impact on less than one-tenth of an acre of wetlands requiring mitigation. Chevron paid in to the coastal land bank maintained in the Rockefeller Wildlife Refuge to comply with OCM’s rules on mitigating for wetlands impacts, with its contribution actually accounting for nearly five times the minimum required by the state.

“By maintaining active management to ensure responsible exploration in our state, we have created new opportunities for growth, not just for the energy industry and our economy, but also for the effort to sustain the environment and wilderness habitats that the people of Sportsman’s Paradise have enjoyed and taken pride in for generations,” Angelle said.

Deeper drilling in South Louisiana has been an ongoing success story for the state and the energy industry in the past few years, with a dozen wells drilled to depths of 18,000 feet or deeper in south Louisiana’s coastal parishes from St. Mary parish to Cameron since March 2009 – of which nine have proven productive and several in excess of 20,000 feet.

The efforts of McMoran Exploration in South Louisiana and in shallow federal waters near the Louisiana coast began to draw interest from the industry in the past three years with exploration of the Davy Jones Prospect, located less than 10 miles off the coast of Vermilion parish in about 20 feet of water in Gulf of Mexico federal waters. The company has reported finding substantial reserves of natural gas it believes can be produced in the area through the drilling of two wells at depths greater than 30,000 feet below surface in federal waters – where drilling depths are often greater than within Louisiana’s state boundaries.

McMoran’s Davy Jones wells required the design and construction of special equipment to deal with the heat and pressure found at those depths, and is nearing completion of work to install and test that equipment prior to initial production testing of the wells.

McMoran has already applied its deep gas theory in Louisiana, with a pair of wells drilled below 20,000 feet on the coast of St. Mary parish that are currently producing better than 50 million cubic feet a day of natural gas and about 500 barrels a day of oil/condensate between them. The company is also a partner in Chevron’s Lineham Creek project..

Companies following that deep gas activity trend north from the Gulf have helped boost a strong year for energy exploration investment and action in Cameron parish, as 58 new wells were permitted in 2011 – more than the total number of wells permitted in the parish in all of 2009 and 2010 combined, and the most wells permitted there in a single year since 1995.

“The level of interest and investment we are seeing in Cameron parish provides opportunities for more available and affordable domestic energy for this nation and opportunities for jobs for our people through new or expanding businesses,” Angelle said.