Repsol Reports Two New Oil Finds in the Gulf of Mexico’s Shenzi Deepwater Field

Friday, Oct 30, 2009

·        Significant new pay was found in the Shenzi G104 well, with a total net pay of 555 feet.

·        New pay was also found in the Shenzi 8 well, in the North Flank of the field.

·        The Shenzi Platform is operating above its nominal capacity, producing in excess of 120,000 barrels of oil per day, 20% more than design capacity.

·        The Gulf of México is consolidated as one of the company’s key growth areas.

·        Repsol has a solid position in the Gulf of Mexico, one of the world’s most attractive deepwater areas and one of Repsol’s ten key strategic projects.

Repsol and its partners BHP Billiton and Hess made two new finds in the Shenzi field  in the Gulf of Mexico. In addition to a new pay found in the existing G104 well, Repsol found oil in the Shenzi-8 well, helping increase future production potential for the area, where output is already  is already above expectations.

Repsol owns a 28 percent stake on the Shenzi development. BHP Billiton operates the consortium, with a 44 percent stake, and Hess Corporation owns the remaining 28 percent.

The Shenzi G104 well, drilled to a depth of 25,605 ft encountered a total of 555 ft of net oil pay. The well had encountered net oil pay of 68 ft in the targeted Lower Miocene interval, in line with expectations. An additional 497 ft of net oil pay was also found in the well in two shallower intervals. The well began producing from the Lower Miocene pay in September, and further evaluation is underway to assess future development potential of these shallower intervals.

In addition, the Shenzi-8 appraisal well, drilled in November 2008, to a  total depth of 25,904 ft encountered approximately 100 feet of net oil pay in the Miocene age reservoirs, opening additional potential to the Shenzi North Flank. These are the same reservoirs as have been successfully developed and are currently producing in the Shenzi South Flank. The well also encountered an additional 30 feet of net oil pay in a shallower reservoir interval.

The platform already installed at Shenzi is producing in excess of 120,000 barrels of oil per day, 20% more than the facility’s design capacity and in excess of production expectations.

Exploration and production in this area are amongst the ten key growth projects in Repsol’s 2008-2012 strategic plan and reinforces the company’s presence in OECD countries.

Production in the Shenzi field began in March 2009 from a platform located in the Green Canyon 653 block 195 kilometres off the Louisiana coast (USA). Production currently  comes from 10 wells connected to the platform and is expected to be expanded to 15 producing wells.

Repsol has significantly reinforced its position in the deep waters in the Gulf of Mexico in the last years after buying into the Shenzi-Genghis Khan project (an extension of the Shenzi field which began producing in 2007) and the recent discovery in Buckskin.

In the last three years, Repsol has reinforced its position in the area, where the company holds 101 licenses in US waters including 16 winning bids in the latest Central Gulf of Mexico Lease Sale 208.

The Gulf of Mexico is on of the world’s most attractive areas offshore.

Source: Repsol