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ABSTRACT: Constraints of Deep-Water Exploration and Development

Ray Pulak, Barry Dickerson, Gerald T. Crawford

In recent years, interest in the exploration and development of deep-water areas has greatly increased. For example, tracts in water depths exceeding 7500 ft have been successfully drilled in the Gulf of Mexico. Although significant amounts of hydrocarbon resources are believed to be present in deep-water areas, current and anticipated hydrocarbon prices affect whether or not such resources are economically recoverable. Minimum economic field sizes (MEFS) needed to offset exploration, development, and transportation costs of the deep-water areas were calculated using three main considerations: (1) geologic (pay thickness, area, porosity, water saturation, and presence of oil or gas), (2) engineering (costs, scheduling, production rates and decline, and oil-gas ratio), and (3) economic (price, price growth, discount rate, and tax effects). Monte Carlo analysis was used for input data generation, and the probabilistic resource estimation offshore (PRESTO) model was used to determine the resources.

Economic drilling depths (EDD) at various water depths derived from MEFS based on $18 and $30/bbl oil price indicate a large portion of resources remain between the high and low case depth limits. The rate of decrease of EDD with increasing water depth increases significantly beyond the 800-ft water depth. Even at $30/bbl of oil, the EDD at 3000 ft water depth is only 7000 ft subsea. Although areas at depths of 1000-1300 ft can be explored and developed economically while the oil price is $18bbl, current technology requires a price of more than $30/bbl for depths beyond 3000 ft to be economical.

AAPG Search and Discovery Article #91003©1990 AAPG Annual Convention, San Francisco, California, June 3-6, 1990