After about a decade in development, Covington-based LLOG Exploration is moving forward on an oil and gas discovery in the Gulf of Mexico despite a tumultuous market in the past few months.
LLOG Exploration specializes in deepwater production and expects to drill inside a discovery known as Taggart which sits 140 miles southeast of New Orleans in the Gulf of Mexico under the Devils Tower Spar. The spar is owned by Williams, a publicly traded Tulsa, Oklahoma-based energy business.
LLOG Exploration inked a deal with Williams, where the businesses would use a tie-back, which refers to an underwater connection between a new oil and gas discovery and an existing production facility.
In recent months, the Louisiana oil and gas industry has struggled since several service businesses have filed for bankruptcy, on-shore exploration businesses are shutting in wells and oil futures plummeted below $0 per barrel at one point while there was a glut of oil and gas in storage tanks.
As of Friday, there are 12 active rigs in the Gulf compared to 26 rigs one year ago. Across Louisiana, there are 31 rigs which include on-shore and offshore facilities down from 69 rigs one year ago.
But LLOG Exploration is bullish that its investment will pay off, especially since it won't go into production until 2022.
"We recognize the current challenging oil market, but we believe that we will see improved pricing in the market," said the company in a statement. "LLOG believes that smart investment through a down cycle can create advantaged barrels as we see pricing recovery over the full life of the project."
The Taggart project was initially leased in 2009 and its first discovery well was drilled in 2013. Additional confirmation wells were drilled in 2015 and 2019. Each of the wells took about 30 days to drill.
"The reserves are well-understood with three wells already drilled," the statement continued. "The host facility is near to the field, so the tie-back distance and total project cost is reasonable."
Williams expects to provide onshore gas treatment and processing to support the Taggart development which has reserves totaling 27 million barrels of oil equivalent over an eight year period.
Williams expects to get the natural gas from the well delivered to its processing plant in Mobile Bay and anticipates it would be marketed in Louisiana.
Acadiana Business Today: This is how Lafayette and state agency officials plan to enforce Louisiana mask mandate; JC Penney will keep Acadiana Mall store open
Lafayette Mayor-President Josh Guillory said he intends for fire and police officers to enforce the governor's order which went into effect Mo…
Three JC Penney stores in Louisiana, including the Acadiana Mall, will remain open.
After about a decade in development, Covington-based LLOG Exploration is moving forward on an oil and gas discovery in the Gulf of Mexico desp…
Vice President Mike Pence will be in Louisiana for a portion of the day Tuesday to discuss the state and its battle against coronavirus.
BancorpSouth Bank bought the former MidSouth Bank property on Moss Street, the final property remaining from the old Lafayette-based bank, for…