Bill will be providing an overview of Devon’s experience in the Gulf of Mexico. He will discuss how Devon evolved into one of the largest Independents in the deepwater. Bill will address the importance of good partners, technical innovation, and disciplined project execution, in ensuring the achievement of targeted economic results.
Devon’s strategy in deepwater has evolved as the company has increased in size over the last 5 years. Entering the Gulf for the first time in 1999 with the acquisition of PennzEnergy, the company began increasing its presence in deepwater; first as a supplement to its low shelf production profile and then as a growth area for the Company. Devon’s deepwater acreage position has grown to over 800 blocks through several strategies that included company mergers and acquisitions (PennzEnergy, SandaFe, Snyder, and Ocean Energy), a drilling joint venture with Chevron, and lease sale acquisitions. Devon’s current yearly production volume of 260 million barrels presents the need for an increased presence in deepwater exploration where the potential for 100 million barrel plus fields exists.
Devon holds or has held positions in a number of deepwater producing fields of varying geologic age, reservoir quality, and trap types (Enchilada, Nansen, Boomvang, Magnolia, Angus, Manatee, Red Hawk ,Zia). Devon’s deepwater production has evolved in a similar manner to how industry has gone into deepwater. Devon’s initial deepwater production was in the flex-trend with fields such a Enchilada. Devon, looking for larger opportunities, then moved out to minibasin plays where we have producing fields at Magnolia, Red Hawk and Nansen. In our search for ever larger discoveries, Devon has expanded into the lower tertiary with announced Walker Ridge discoveries at Cascade, St. Malo and Jack.
Reservoir performance has in general exceeded expectations. However, it is important to combine project innovation and execution to ensure excellent economic results. In particular at Nansen / Boomvang and Red Hawk the use of industry first floating production systems accelerated project startup greatly improved overall profitability.