Two gas discoveries in Vermilion Block in Gulf of Mexico

Jul 10, 2000 02:00 AM

Magnum Hunter Resources announced that it has participated in two new natural gas discoveries on Vermilion Block 84 in the Gulf of Mexico. The Vermilion 84 B-2 discovery well was completed in a Miocene Sand below 11,500 feet and is currently flowing at a rate of 7.5 mm cf of gas and 200 bpd of oil.
The second recent discovery, Vermilion 84 #A4 ST well was drilled from the production platform and encountered three pay sands. This well has tested gas and should flow at rates in excess of 5.0 mm cfpd of gas. Magnum Hunter owns a 16.67 % working interest in the B-2 exploration well and a 16.25 % working interest in the A4 exploration well.
Burlington Resources is the operator of both wells and holds a 66.67 % working interest in the B-2 exploration well and a 65.0 % working interest in the A4 exploration well.
The earlier discovery on this block was the Vermilion 84 #5 well completed in February 2000 flowing at a rate of approximately 16 mm cf of gas and 1,000 bpd of oil from a Miocene Sandbelow 13,000 feet with Magnum Hunter owning a 12.5 % working interest.
The Company has also participated with a 25 % working interest in a new discovery in the High Island area which is currently being completed from an existing platform.

Separately, Magnum Hunter has recently received final approval of awards for a 25 % working interest in seven new OCS lease blocks in the Gulf of Mexico by the Minerals Management Service. All seven blocks are located in less than 250 feet of water with nearby existing infrastructure. Prospects in these blocks, which could be drilled within the next twelve months, complement recent exploration discoveries by the Company and add to its growing prospect inventory in the Gulf of Mexico.
Commenting on the recent activity, Mr. Matthew C. Lutz, Chairman and Executive Vice President, stated, "The Company continues to expand its presence in the Gulf of Mexico and has now been successful on five of five exploration prospects drilled in 2000 and nine of eleven under our program initiated in May 1999. The Company's first production from the Gulf of Mexico commenced in February 2000.
When fully developed in early 2001, we expect the new discoveries to generate annualised net production to Magnum Hunter in excess of 9 bn cf and annualised revenues of approximately $ 40 mm at current oil and gas prices."

Magnum Hunter Resources is one of the nation's fastest growing independent exploration and development companies engaged in three principal activities:
(1) the acquisition, production and sale of crude oil, condensate and natural gas;
(2) the gathering, transmission and marketing of natural gas; and
(3) the managing and operating of producing oil and natural gas properties for interest owners.

Source: Magnum Hunter Resources, Inc.
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