Murphy drops Thunder Bird due to low oil price

Murphy Oil, an independent oil and natural gas exploration and production company, has abandoned its sidetrack well in the U.S. Gulf of Mexico due to low oil price. 

Murphy said on Thursday that its Thunder Bird sidetrack well in Mississippi Canyon Block 819 in the Gulf of Mexico reached the targeted Middle Miocene zone at a total depth of approximately 21,900 feet.

The well encountered producible hydrocarbons with approximately 75 feet of pay, Murphy said.

However, the company explained that due to current low oil prices and capital allocation review for the 2016 budget, a decision has been made to plug and abandon the well.

Murphy operated the Thunder Bird well with an 87.5 percent working interest.

Murphy ups exploration expense guidance

Murphy also said on Thursday it has increased its exploration expense guidance for the fourth quarter 2015 from $132 million to $235 million, of which $197 million is attributable to dry hole expense.

Included in the dry hole expense is approximately $54 million related to the Solomon well and approximately $109 million related to the Thunder Bird operations, including $20 million related to the original well drilled in a prior year.

To remind, Marathon Oil on Thursday abandoned the Solomon exploration well where Murphy has 20% interest.