Energy Partners, Ltd. has made two discoveries in the Gulf of Mexico and commenced production from its East Cameron Block 9 Field. In High Island Block A-538, the Company successfully drilled a new field discovery. The No. 1 well was drilled in 220 feet of water to a total depth of 2,797 feet (2,600 feet TVD). Hydrocarbons were encountered in four sand intervals with 156 feet of net pay. EPL operates this project with a 33.3% working interest; Tana Exploration Company LLC owns an equivalent interest, and Newfield Exploration Company also participates in the well. The evaluation of development options for this field has just begun.
In the High Island Block 72 Field, EPL recently drilled and completed a discovery well in 35 feet of water. The High Island Block 72 No. 2 well was drilled to a depth of 8,338 feet (7,969 feet TVD) and encountered 38 feet of apparent natural gas pay in two sands. The Company also operates this well with a 78.75% working interest, and KCS Energy, Inc. owns the remaining 21.25% working interest. Development options for this well are currently being evaluated.
The East Cameron Block 9 Field began production on June 10, and is currently producing at an approximate rate of 10 million cubic feet of gas per day from the discovery well announced in January 2002. The Company achieved a cycle time of less than five months from discovery to first production from this project. EPL is the operator of this well and owns a 50% working interest. Nexen Petroleum USA, Inc. owns the remaining 50% working interest. EPL and Nexen own additional acreage in this area with further prospect potential. EPL will evaluate results from this well to determine its future development plans for the area.
Commenting on this recent activity, Richard A. Bachmann, EPL's Chairman, President and Chief Executive Officer stated, "Our exploratory drilling program has begun to bear fruit and we are looking forward to drilling a number of moderate to higher potential prospects throughout the balance of this year. The second half of 2002 promises to be very busy for us. We are adding new drilling prospects to our inventory by trading a portion of our interest in existing EPL prospects for similar interests in our partners' exploratory prospects. As a result, we expect the pace of exploratory drilling activity to accelerate. At the same time, we are ratcheting up our development and exploitation operations."
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