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Energy XXI spuds GoM well, cuts workforce by 18%

Written by  Thursday, 15 June 2017 09:40

Energy XXI Gulf Coast (EGC) has spudded its first well of the year at West Delta 30 off the coast of Louisiana, as the company announced an 18% workforce reduction.

Image of West Delta operations, from EGC.

Development well West Delta 30 L-14 ST2 High Tide was spudded last week on 7 June.

Plans for the well include drilling to a total vertical depth of 8500ft. First production is expected in Q3 2017.

EGC's current development plan is focused on the West Delta area where two to four wells planned for 2017, with over 40 identified future development drilling locations spread across the company's asset base.

The West Delta 30 field, which was discovered in 1948 by Humble Oil, is a large salt dome.  Productive sands range from 2000-17,500ft in depth and generally produce via strong water drive.  Minor faulting that is secondary to the major normal fault separates hydrocarbon accumulations into compartments.  

The West Delta 30 field includes the West Delta 27, 28, 29 and 30 blocks and is the third largest oil field on the Gulf of Mexico shelf, having produced in excess of 749 MMboe since first production.  The field is 21mi offshore of Grand Isle, Louisiana in approximately 45ft of water.

The company holds 100% stake in West Delta.

EGC also announced it has implemented additional workforce reductions to lower its overhead costs and better align its staffing with its current expected operational plans. 

Total headcount was reduced by approximately 18%, which will result in severance and separation expenses of approximately US$2.5 million in Q2 2017.  EGC will realize a total of approximately $8 million to $8.5 million of annualized general and administrative and lease operating expense savings from this reduction.

"While we continue to develop our long-term strategic plan, our near-term commitment to HSE excellence, minimizing base production decline and reducing operating and overhead expenses remains unchanged. We will continue to evaluate drilling and recomplete projects and pursue those that are value adding. The reductions in force are difficult but we are in a challenging commodity price environment and we must better align and manage our costs through this time to better position EGC and allow us to be more competitive in the long-term," says Douglas E. Brooks, EGC CEO and president.

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