Wednesday 13 March 2019

US independent Murphy Oil has encountered oil and gas in its Cholula-1 well in the Salina del Istmo Basin offshore Mexico, though further drilling will be required to confirm commerciality. Murphy was targeting gross mean resources of 220mmboe in the Upper and Lower Miocene and partner Ophir Energy has indicated that the results were broadly in line with pre-drill expectations. The Salina del Istmo Basin is a sub-basin of the Sureste Basin, and sits in deeper waters outboard of the shallower waters of the Zama discovery and Cairn Energy’s three exploration wells planned in 2019. Cholula-1 sits in Block 5, which was the most contested block in Round 1.4 and awarded in December 2016. The well was drilled to 4000m in a water depth of 750m, and was expected to cost just under $47m. Despite the promising results, Ophir has also announced that it is in advanced discussions to sell its 23.33% share of Block 5 for a modest profit.

Cairn has also provided some more colour around its three well Sureste Basin programme, highlighted in our ‘Exploration Watch: 2019 exploration wells’ report and due to kick off in Q3 2019. The company will drill two exploration wells in Block 9 as operator, and one well as a partner in the ENI operated Block 7. In Block 9, Cairn will drill the Alom prospect, targeting gross mean resources of 140mmboe in stacked shallow marine Pleistocene sands. The multiple objectives are supported by Direct Hydrocarbon Indicators (DHI) seen on seismic. Alom is located in the south east corner of the block, in 140m of water (the shallowest waters of all the planned wells) and will be drilled to a total depth of around 3000m in an estimated 40 days. The Bitol prospect also sits in Block 9, to the west of Alom, and will target stacked Tertiary sands with estimated gross mean resources of 180mmboe. The well sits in 180m of water and, with a deeper planned total depth of 5,300m, is expected to take around 60 days to drill.

Block 7 contains the Ixchel, Yatzil and Ehecatl prospects, but the final prospect choice has yet to be confirmed. The well will however target approximately 200mmboe in stacked Tertiary sands. The shallow targets have been proven by previous wells, but the deeper sands are frontier targets. At 438m, the well will sit in the deepest waters of all three wells and is expected to take 50-60 days to drill.

Block 5 JV: Murphy Oil (30% and operator), Petronas Garigali (23.34%), Sierra Oil & Gas (23.33%), Ophir Energy (23.33%)

Block 7 JV: ENI (45% and operator), Cairn Energy (30%), Citla Energy (25%)

Block 9 JV: Cairn Energy (65% and operator), Citla Energy (35%)