Murphy Oil has made discoveries offshore Vietnam and Mexico, the company has reported.
The discovery in Mexico was Murphy's first exploration test on Block 5 in the Salinas Basin. The Cholula-1EXP exploration well was drilled in about 2,300 feet water depth and discovered hydrocarbons in the upper Miocene target objectives, encountering about 185 feet of net pay.
Murphy, which is operator of the block with 30% interest, says the results of the well have significantly de-risked the block and the company is currently evaluating future appraisal plans.
The well cost about US$12 million net to Murphy. Partners in the block, which is in 700 to 1,100 meters water depth, are wholly-owned subsidiaries of Petrolium Nasional Berhad (“PETRONAS”) (23.34 percent WI), Ophir Energy (23.33 percent WI) and Sierra Oil and Gas (23.33 percent WI).
In Vietnam, Murphy made a discovery on Block 15-1/05 in the shallow water Cuu Long Basin. The LDT-1X exploration well successfully encountered about 320 feet of net oil pay in the primary objective and an additional 62 feet of net oil pay in a secondary objective. The LDT-1X discovery will be incorporated into the development of the adjacent LDV field where Murphy is operator and progressing toward first oil in 2021.
Early in 2019, Murphy received the Declaration of Commerciality for the LDV field and expects to move forward with sanction of the field development later this year.
The well cost Murphy about $13 million net. Murphy’s subsidiary, Murphy Cuu Long Bac Oil Co., is the operator of the block and holds 40% interest. Partners in the block include PetroVietnam Exploration and Production Company (“PVEP”) with 35% carried interest and SK Innovation with 25%.
“I am extremely pleased with the early success of our 2019 exploration program," says Roger W. Jenkins, President and Chief Executive Officer. "Our drilling team did an outstanding job executing a pace-setter well in Mexico that allows us to dramatically improve the economics for the development of the block. The well confirms our view of the highly prospective Block 5 and, along with our partners, we are planning a Cholula appraisal and further exploration program in 2020. While it is too early to quantify ultimate volumes without additional appraisal, we are excited to have successfully encountered pay in all of our objectives in an oil-charged system. We especially look forward to incorporating the well results into multiple look-a-like prospects that are near the Cholula well,” Jenkins added.
“In Vietnam, the LDT-1X well has met our pre-drill expectations and is a positive resource addition to our growing business in the country, with the oil reservoir section having properties exceeding our pre drill estimates. The data collected from the well also yielded valuable information that will be utilized in future exploration activity on Block 15-1/05.”
Murphy entered Vietnam in 2012 with the award of deepwater Blocks 144 and 145. In 2013, we were awarded shallow water Block 11-2/11 and in 2017, we farmed into Block 15-1/05.
In December 2016, Murphy and joint venture partners were the high bidder on Block 5.