McMoRan discovers additional hydrocarbons at Davy Jones appraisal well

McMoRan announced results from interim logging operations at the Davy Jones offset appraisal well located on South Marsh Island Block 234 in 20 feet of water.

The Davy Jones offset appraisal well (Davy Jones No. 2) is drilling below a true vertical depth of 27,900 feet. Preliminary data from wireline logs over the interval from 25,400 feet to 27,300 feet, which continue to be evaluated, indicated over 200 feet of gross sand and approximately 100 net feet of sand, based on intermittent porosity data available, in multiple Wilcox zones that appear to be hydrocarbon bearing. Additional data will be required to complete the evaluation.

Paleo and log data indicate the offset well to be approximately 1,300 feet structurally high (up dip) to the Davy Jones discovery well (Davy Jones No. 1) and confirm the major structural features of the Davy Jones prospect. All but one of the sands in the discovery well appear to be present in the offset well, which would confirm sand continuity on the Davy Jones feature. This information also suggests that the Wilcox sands at Davy Jones could be sheet sands (not channel sands) and could be present at other McMoRan prospects on its acreage position within the Davy Jones trend. These results support the wedge effect seen on other large sub-salt structures in the Gulf of Mexico, where sands generally thicken on the flanks of the structure.

The Davy Jones No. 2 well is located two and a half miles southwest of the Davy Jones No. 1 well. Based on analogies with a number of other large sub-surface structures in the Gulf of Mexico, McMoRan believes there is potential for thicker sands on the northern part of the structure, which is closer to the depositional source.

McMoRan is deepening the well to evaluate additional objectives, including possibly the Upper Cretaceous (Tuscaloosa) sections. Paleo data at 27,742 feet indicates the Davy Jones No. 2 well is in the Midway formation, which is a geologic interval below the Wilcox and above the Upper Cretaceous (Tuscaloosa). McMoRan’s interpretation indicates that the Upper Cretaceous (Tuscaloosa) section, if present in deeper horizons on the Shelf at Davy Jones, would be correlative with the prolific Tuscaloosa trend onshore South Louisiana. If confirmed, McMoRan believes the combination of productive Wilcox and Tuscaloosa sands on the same structure could enhance the prospectivity of Davy Jones and the value of McMoRan’s other ultra-deep prospects on its acreage position within the Davy Jones trend.

As previously reported, in January 2010 McMoRan logged 200 net feet of pay in multiple Wilcox sands in the Davy Jones No. 1 well on South Marsh Island Block 230. In March 2010, a production liner was set and the well was temporarily abandoned to prepare for completion. McMoRan has ordered long-lead time and specialty items, including a 25,000 PSI production tree, safety valve and blowout preventer, and expects to complete and flow test the well by year-end 2011.

Davy Jones involves a large ultra-deep structure encompassing four OCS lease blocks (20,000 acres). McMoRan holds a 60.4 percent working interest and 47.9 percent net revenue interest in Davy Jones. Other working interest owners in Davy Jones include: Energy XXI (15.8%), Nippon Oil Exploration USA Limited (12%), W.A. "Tex" Moncrief, Jr. (8.8%) and a private investor (3%).