Saratoga Resources has entered negotiations with McMoRan Oil and Gas regarding a potential joint venture on Saratoga’s Long John Silver Prospect at the Vermilion 16 field in the US.
The objective of the joint venture is to target ultra-deep shelf Lower Tertiary (Wilcox) and Cretaceous objectives at depths of 23,000-30,000ft.
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For the joint venture, Saratoga anticipates contributing its deep rights (20,000ft and below) of 4,000 acres and access to its production and pipeline facilities in Vermilion 16.
McMoRan will contribute approximately 6,000 acres to the joint venture.
The Vermilion 16 field is located in state waters offshore Vermilion Parish, Louisiana, 40 miles south of Lafayette.
The Long John Silver Prospect is situated in one of the main Lower Wilcox depositional fairways that fed McMoRan’s Davey Jones discovery on the Gulf of Mexico Shelf and the Walker Ridge Wilcox discoveries in the Gulf of Mexico.
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By GlobalDataAs per the negotiations, Saratoga will retain its existing rights to all shallower objectives in the subject acreage, including all proved, probable and possible reserves.
The reserves consist of 8.7 million barrels of oil equivalent of proved reserves and 18.6mmboe of total reserves at 1 January 2011.
Saratoga will retain the right to process its production from shallower objectives at its production and pipeline facilities.
Saratoga owns and operates a central production facility in Vermilion block 16, which has a production capacity of 100 million cubic feet per day and a two-mile pipeline to shore.
The company intends to continue its current development plans with respect to its shallower reserves in Vermilion 16, including the drilling of development wells to begin in the first quarter of 2012.
