Byron Energy relinquishes Gulf of Mexico lease
- Business & Finance
U.S. Gulf of Mexico operator Byron Energy is relinquishing its South Marsh Island Block 6 Lease, located offshore Louisiana.
The company drilled two wells in the lease and found and logged hydrocarbons in 2014 and 2016.
In June the company said it wouldn’t re-enter its SM6 #2 well which had been left temporarily abandoned since March 2016.
The reason for not finishing the job at the well, Byron said, were concerns about the wellbore’s mechanical integrity and geologic conditions encountered while drilling.
Byron said that the SM6 #2 well in 2016 encountered pressures that were much higher than expected, which indicates a high geologic risk of the presence of sand below the deepest penetration. In addition, concerns about the intermediate cement job in the SM6 #2 were high and the well was then abandoned.
Providing rationale for the decision not to proceed with the development of the discoveries, the Gulf of Mexico operator said that no scenario made economic sense in the current oil and gas pricing environment.
Consequently, Byron decided to relinquish the SM6 lease to BOEM, and put its focus on its other lease at the South Marth Island Block 71.
Maynard Smith, Bryon’s CEO said: “After considering several options to develop the SM6 F Sand pay, it became clear that the economics were simply too marginal to be attractive. Because of Byron’s limited capital it was decided to focus our staff, energy and capital on bringing our South Marsh Island Block 71 discovery into production as soon as possible.”
To remind, Offshore Energy Today reported on Wednesday that Byron would buy from Laredo Construction a used tripod jacket, decks, helideck, boat landing and production equipment that will be set and utilized at its South Marsh Island Block 71 discovery.
Offshore Energy Today Staff