LLOG Exploration Offshore and Repsol E&P USA have signed an asset exchange and joint participation agreement to develop deepwater offshore assets in the Gulf of Mexico.
The agreement encompasses drilling of a delineation well at Repsol’s Leon discovery. LLOG and Repsol will have a 33% stake and a 50% interest respectively in the well.
Drilled by Repsol in late 2014, the Leon discovery is situated on Keathley Canyon block 642 in 6,000ft of water and around 200 miles offshore Louisiana. During the drilling campaign, the well encountered nearly 500ft of high-quality net oil pay in multiple sands in the Lower Tertiary formation.
The scheduled drilling will completely delineate the well, following which, potential development options of the field will be assessed.
Repsol will also acquire a 30% stake in the LLOG-operated discovery Moccasin in Keathley Canyon 736. LLOG will retain a 31.35% working interest in the field.
Discovered in 2011, Moccasin was drilled to a total depth of more than 31,000ft. LLOG found around 400ft of net oil in the Lower Tertiary. Subsequently, LLOG licensed the block in a 2017 Lease Sale.
As Moccasin is located less than 20 miles from Leon, co-development of the two fields is currently under consideration.
The agreement between LLOG and Repsol also covers Keathley Canyon blocks 642, 643, 686 and 687.
Both the companies are currently joint owners in the ongoing development of the LLOG-operated Buckskin discovery, situated on Keathley Canyon blocks 785, 828, 829, 830, 871 and 872.
First production from Buckskin is expected in the middle of 2019.
LLOG president and CEO Philip LeJeune said: “These highly prospective deepwater discoveries are in close proximity and are targeting the same Lower Tertiary formation that we are exploiting at Buckskin.
“We look forward to working together with Repsol on other future deepwater developments in the Gulf of Mexico and greatly value our strong working relationship.”