Enormous finds offshore Brazil have drawn global attention to the promise of sub-salt oil and gas, but Houston-based Swift Energy is seeking to attract partners to a sub-salt prospect much closer to home.
Swift is seeking deepwater players as future partners in a potential sub-salt find in the “onshore” US Gulf of Mexico, under its Lake Washington field, which lies in water depths of 10-15 feet just off the southeastern Louisiana shore. It says the sub-salt prospect could hold as much as 350 million barrels of oil equivalent.
“There’s a good probability of finding a Lake Washington below Lake Washington,” said company president Bruce Vincent at the Independent Petroleum Association of America’s Oil and Gas Investment Symposium in New York on Monday.
But the risky nature of this sort of exploration means that Swift will not proceed without first securing a partner, or partners, with experience drilling in deep water. “There’s a lot of deepwater players that have had a lot of success in the sub-salt,” said chief executive Terry Swift. “Most of them are very big, and we’re looking for that kind of balance sheet, we’re looking for that kind of expertise, and someone who wants that size of a prize.”
“We have no reason to take that risk on our own,” Swift added.
The company plans to sell down its 100% stake to just half or a third ownership, and to announce a joint venture by the end of this year. Its confidence in the play, and in its appeal to potential buyers, is based in part on its reexamination of samples from a well drilled through the salt layer by Amoco in 1990. “If you go to our area, and you look at depth of penetration, there’s very very few wells at 21,000 feet, and precious few that have done it under salt,” Swift said.
The company intends to start drilling its first sub-salt exploration well next year. A back-of-the-envelope calculation for well cost is around $25 million, said Swift, but Vincent noted that costs could range from $20 million to $30 million, depending on the design and depth of the well. The company and its partner or partners will have to decide whether to build a cheaper, shallower test well, or a costlier, deeper “all-purpose” well that could be completed.
“We’re wrestling with those numbers right now,” Vincent said.
