USA: ConocoPhillips strikes out at Melmar offshore prospect. Slumps to $1.5B loss

ConocoPhillips, a US-based exploration and production company, has failed to find hydrocarbons at a well in the U.S. Gulf of Mexico.

The company drilled the Melmar exploration well at the Perdido Fold Belt in the deep waters of the Gulf of Mexico, however only managed to encounter non-commercial quantities of oil.
The well, located in the Alaminos Canyon area, was spudded in December 2015, using Maersk Drilling’s 2014-built drillship Maersk Valiant. ConocoPhillips, the operator of the project, with Hess as partner, said on Thursday the well was plugged and abandoned as a dry hole.

Back in mid-2015, ConocoPhillips said that after Melmar, the company would have two remaining slots on the Maersk Valiant drillship, with plans to drill the Socorro prospect with one of these slots, and was at the time evaluating and high-grading its drilling prospects to fill the final operated slot.

To remind, ConocoPhillips last year said it would scale back it deepwater exploration efforts, notably in the Gulf of Mexico, with the aim to reduce exposure to programs with greater resource risk and longer cycle times. The company then rescinded a drillship contract it had with Ensco, and took a charge of around $400 million in the third quarter of 2015.

In its quarterly presentation on Thursday, April 28, 2016, ConocoPhillips said has reduced its 2016 capital expenditures guidance from $6.4 billion to $5.7 billion, primarily driven by reduced deepwater exploration activity, deferrals and lower costs across the portfolio.

Financial results-wise, the oil company posted first-quarter 2016 net loss of $1.5 billion, compared with first-quarter 2015 earnings of $272 million.

Offshore Energy Today Staff

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