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Coelacanth Field Illustrates Deep Potential in Flex Trend

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Sailaway of the Coelacanth platform took place on October 15, 2015

In November 2015, Walter Oil & Gas Corporation, operator, Ridgewood Energy Corporation, as manager for its Funds and for ILX Holdings, LLC (a Riverstone Holdings LLC company), Gordy Oil Company and Houston Energy Deepwater Ventures, LLC completed construction of the platform for their Coelacanth Field and installed it in Ewing Bank 834 (EW 834) in the Gulf of Mexico. Walter choose the name “Coelacanth,” a rare order of fish thought to be extinct but rediscovered in 1938, for the project, because few believed that there were any remaining discoveries on the Gulf of Mexico shelf significant enough to justify this type of platform. The Coelacanth platform is the third-tallest structure of its kind in the Gulf—at 1,312 feet, it is roughly the same height as the Empire State Building. First production is anticipated in mid-2016.

“We are very excited about the Coelacanth project. Technological advancements in the Gulf of Mexico continue to enable the discovery and development of new resources to the benefit of all stakeholders, including the public, the U.S. Government and our shareholders,” says Ron A. Wilson, President and CEO of Walter.


The Gulf of Mexico has been actively explored for oil and gas since 1938, when Pure and Superior Oil Company built the first freestanding drilling platform in 14 feet of water, an astonishing one mile offshore. Despite limited geologic and geophysical tools, early explorationists made significant discoveries in the shallow waters of the Gulf. Engineers were then faced with the daunting task of accessing and producing oil and gas in a marine environment. Through hard work and innovation, the offshore oil industry was born.

It soon became apparent that the complex geology of the Gulf is both a curse and a blessing. The curse is that large salt bodies deformed the sediments in convoluted patterns, making the subsurface picture difficult to image and understand. But the salt-related structures are a blessing because they provide connections to oil-source beds deep in the earth and because their unusual shapes create traps for hydrocarbon-bearing sands. As early as 1941, geologist Orval Lester Brace observed: “It may be tentatively assumed that the Gulf of Mexico is a potential source of salt-dome oil. Whether or not it will ever be economically feasible to explore these waters for the domes that must exist is a question for the future to answer.” This is a question that has relevance to this day.

Ewing Bank Problems

The Ewing Bank area, located roughly south of New Orleans and at the edge of the continental shelf, has proven particularly challenging. Water depths vary from 500-2000 feet, well beyond the range of the jackup rigs that drilled early wells in the Gulf of Mexico. With the invention of semisubmersible rigs, it became possible to explore the area, but these rigs are expensive and prone to drilling delays associated with hurricanes.

In addition, Ewing Bank is underlain with unconsolidated deepwater shales that create imaging issues for seismic data and produce problems when drilling through them. Shales in this region were deposited and buried quickly, so the rock never fully compacted. Water trapped in the rock creates geopressure (abnormally high pressure in rock–pore spaces) that requires extra care while drilling to overcome potential hazards.

Another problem confronting explorationists was the apparent lack of sands deep in that part of the Gulf, which are needed to store trapped hydrocarbons. Largely because of drilling difficulties and costs, and common beliefs that sands were largely absent below geopressure, early wells in the area stopped when they encountered geopressured rocks.

During the early days of exploration, seismic data was limited to 2D lines. These lines were spatially sparse and imaged geopressure poorly, providing little encouragement to risk expensive deep tests. In the 1990s, regional 3D seismic data became available, but initial surveys were unable to accurately image the deep section. Based on this relatively poor data, the few deep wells drilled in the area did not find commercial hydrocarbons. Even more discouraging, these wells encountered very little reservoir-quality sand for thousands of feet below geopressure. Paleontological data indicated that the deep section was older than expected and far removed from known sand deposition centers.

Faced with complex salt structures, seismic imaging limitations, shallow geopressure, and lack of known sands, deep exploration in the ‘Flex Trend’ (lying in water depths between 500-2000 feet) was limited and largely unsuccessful, causing many oil and gas companies to turn their attention elsewhere.

Improved Technology

A significant breakthrough occurred in 2007 when TGS-Nopec Geophysical, a seismic acquisition company, released a 5000 square mile 3D seismic survey that included the Ewing Bank area. The “Sophie’s Resolve” survey had improved acquisition parameters and a sophisticated migration technique that allowed imaging of the deep geopressured section, including highly contorted salt bodies, which were known to trap hydrocarbons in shallower zones.

Although deep wells confirming the presence of sand were still absent, the Sophie’s Resolve survey showed interesting high-amplitude events similar to those associated with sands holding oil and gas. These seismic hydrocarbon indicators (HCIs) encouraged exploration companies to drill deep tests far below the section of known sands and deep into geopressure.

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New seismic data showed hydrocarbon indications deep on the north side of a buried salt feature.

In 2008, Walter purchased a large portion of the TGS Sophie’s Resolve survey and began to actively explore for deep prospects adjacent to salt. Walter drilled a number of wells with this data in a variety of water depths, including a 2012 deep gas discovery in South Timbalier (ST) 127 (83-feet water depth). In 2013, Walter participated in LLOG’s highly successful ST 231/232 Powerball Prospect (218-foot water depth), which produces from an 18,000-foot gas zone adjacent to a buried salt feature. Also in 2013, Walter drilled its ST 311 Megalodon Prospect (395-foot water depth), which encountered condensate-rich gas at 18,300 feet. This field, which began production in 2015, is also associated with a complex salt feature that was poorly imaged on previous data. In all cases, the Sophie’s Resolve data clearly identified a significant HCI that proved to be associated with hydrocarbon-filled sands.

Finding Coelacanth

The greatest impact for Walter from the new seismic data came in deeper water with the discovery of Coelacanth Field. The field in EW 834 is located approximately 125 miles south of New Orleans in a water depth of 1,186 feet.

When Walter first leased the EW 834 block in 2006, existing 3D seismic data suggested the presence of shallow oil sands on the northern flank of a buried, overhung salt dome. There were indications of deeper potential, but the data was poorly resolved and the presence of deep sands questionable.

After acquiring the TGS Sophie’s Resolve seismic survey over the block in 2008, Walter mapped a more promising anomaly at 20,000 feet, deeper than any existing well had penetrated.

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Given the depth and expense of the initial well and also considering that 2009 was the nadir of the financial crisis, it was not an ideal time to seek joint venture partners for this prospect. Nonetheless, Walter was able to secure an excellent group of partners and on March 23, 2010 the exploratory well was spudded. This well was Walter’s first test of the new seismic data, but less than a month later, the Deepwater Horizon semi-submersible drilling rig caught fire, shutting down all deepwater drilling in the Gulf of Mexico. The Government allowed Walter to drill to 15,000 feet before leaving the location.

It was almost two years before drilling on EW 834 could resume. In February 2012, the semisubmersible Ocean Victory owned by Diamond Offshore completed drilling the vertical hole to the target depth of 21,000 feet. The well encountered oil in several zones with enough reserves to justify development. According to Pete Hetherington, Walter’s geologist for the Coelacanth project, “The Coelacanth discovery demonstrates that, despite over 70 years of active exploration, the Gulf of Mexico remains a prolific hydrocarbon province.”

Securing the Leasehold and Joint Venture Partners

Finding the Coelacanth reservoirs was an arduous task, but equally challenging tasks were assembling the leasehold containing all proven and potential reservoirs associated with the discovery well and bringing together a group of joint venture companies to make field development possible. The process started with the existing leasehold at EW 834, but took several years to complete.

The leasehold over Coelacanth was unitized (hatched area) in April 2015. Map created using OWL 7 Database.

For EW 834, Walter was the high bidder on the block at the federal offshore lease sale in March 2006. Next came block EW 790, due north of EW 834. Noble Energy, Inc. was the owner of the 790 lease. Walter entered into a co-development and farmout agreement with Noble under which Walter would be allowed to earn certain rights and interest on the block by drilling a well on EW 834.

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The leasehold over Coelacanth was unitized (hatched area) in April 2015. Map created using OWL 7 Database.

In March 2010, the same month Walter spud the EW 834 well, Walter was high bidder at the federal offshore lease sale and acquired EW 835. This small, triangular block is located immediately east of EW834 on the border with Mississippi Canyon Area.

The final piece of the lease puzzle was MC 793, immediately east of EW 835. BP Exploration & Production owned the lease. Walter acquired the lease from BP in August 2012 following the Coelacanth discovery at EW 834.

Once the leasehold over the reservoir was secure, Walter and its partners sought unitization of the acreage over the Coelacanth prospect. The process took some time, but in April 2015, the EW 834 owners were awarded a unit by the Bureau of Safety and Environmental Enforcement that covers portions of each of the leases described above from the surface down to 26,000 feet.

In short, to assemble the acreage for Coelacanth and secure joint venture partners, 17,600 acres were acquired by Walter via multiple federal offshore lease sales and acreage purchase and co-development arrangements. To establish the joint venture, Walter negotiated and entered into over a dozen commercial agreements with seven different offshore companies, including majors, large independents, and small independents. “The commercial side of Coelacanth was unique and challenging,” said Chad Elias, Manager – Offshore Land & Legal for Walter. “This project demonstrates that the Gulf of Mexico remains an exciting arena for joint venture efforts.”

Building the Platform

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The Coelacanth Platform was built at Gulf Marine Fabricators LP of Ingleside, Texas.

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The jacket’s top is rectangular at 45x105 feet.

Water depths in the EW 834 area are too shallow for a typical floating production system (TLP) because of the expected fatigue on the conductors (pipes connecting the wells to the floating system) and a moored floating production system does not support dry trees. The choice came down to either subsea development tied back to a neighboring structure or a fixed-legged platform design. Walter and its partners chose a fixed-leg platform to eliminate production issues associated with the high-pressure oil zones and to allow for additional savings on future operations. During development drilling, a lower-cost platform rig can be used instead of a semisubmersible. A fixed platform also allows for dry trees that are easier to service and control by platform personnel.

Planning for the platform’s jacket and deck began soon after the field’s discovery in early 2012. The platform’s 30-year design was developed by OFD Engineering. The construction project was bid out to a few select shipyards that had built large platforms in the past. Gulf Marine Fabricators LP of Ingleside, Texas was awarded the contract.

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The pile guides (yellow) are at the base of the platform’s legs.

The large diameter jacket legs were built with steel plate from Austria, which was ordered early and rolled on site at Gulf Marine. Most of the remaining jacket cross bracing was procured from South Korea as rolled tubulars, pre-cut and pre-coped to fit. Steel for the topside structure was a similar mixture of plate origin. Construction began in March 2013 and was completed in October 2015 after approximately 2,190,000 man-hours of work. Sailaway occurred on October 15. “The key to a successful project lies in assembling a knowledgeable and competent team that covers all of the required disciplines and that works well together,” said Jack Horton, Walter’s Construction Manager

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Coelacanth’s 3-level deck will hold wellheads and processing equipment. The deck and 14 piles await transport to EW 834.

Located in 1,186 feet of water, the Coelacanth Platform is the third largest fixed platform in the Gulf of Mexico after Shell Bullwinkle (1352-foot water depth; 50,000 short ton jacket) and BP Pompano (1294-foot water depth; 38,000 short ton jacket). The jacket structure is just over 1200 feet long and weighs approximately 30,000 short tons (60 million pounds). At the base, the main legs form the corners of a 330x330 foot square, enough room for two football fields side by side. The jacket tapers down to a 45x150 foot rectangle just above the water surface, where the 3-level deck mounts on the main corner legs and two center “false leg” posts for support. Each deck level is approximately 105x225 feet, providing nearly 65,000 square feet for drilling and production operations.

The platform will be held in place by 14 piles driven through guides at the base of each main leg, 3 piles each on two legs and 4 piles on each of the other legs to provide stability during hurricane force winds and seas. Each pile is 108 inches in diameter and is driven by subsea hydraulic hammers through the guides to 450 feet below the seafloor, securing the platform to the seabed. The jacket-loading operation took 2.5 days and required that the jacket be pulled over a quarter mile until it reached its final position on the Heerema launch barge, H851, the largest in the world at 853 feet long. The structure was pulled at a rate of 25-30 feet per hour using four strand jacks. Each jack has the capacity to pull nearly 2 million pounds and the operation used about 60 miles of high-strength steel strands to move the jacket.

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Waxed timbers, grease and Teflon pads helped move the jacket onto the barge.

Skidding was accomplished using waxed timbers, special grease, and Teflon pads. The combination produced a very low 3.5% sliding friction. The rate of movement was controlled with a combination of jack cycle time and ballasting adjustments needed to keep the barge in a level plane.

Future Development Plans

Walter and its partners plan to drill several wells into the main Miocene 20,000-foot Sand oil reservoir encountered in the exploratory well.

Other oil zones in the existing well, while relatively thin, tie to robust seismic amplitude anomalies nearby. These HCIs, interpreted to be large oil reservoirs, will be tested by development wells that also target the proven oil zone. Another development well will capture a proven oil zone at 9000 feet, which was discovered, but not produced, by an older well on the block. There are several other shallow HCIs believed to be oil reservoirs that can be accessed from the platform.

In addition, the Coelacanth Platform is designed to serve as a production host for future discoveries from other nearby leases.

Production will flow from Coelacanth Field to the north through two pipelines, one for oil and one for natural gas. The oil pipeline will connect to the Shell Amberjack system in Grand Isle block 115. The gas pipeline will connect to the Discovery pipeline system also in Grand Isle block 115.

The platform will be fully manned while in production mode and will house up to 100 personnel while drilling wells. Walter plans to drill up to six development wells, making use of a dedicated 2500 hp platform rig that the company secured from H&P by way of a bareboat charter arrangement. This charter gives Walter and partners exclusive use of the rig for a multi-year period.

Walter and its partners chose this approach because of the limited number of 2500 hp platform rigs available to drill its deep wells, the need to modify the rig for geopressured operations, and the desire to speed development of Coelacanth Field. The rig has hook load capacity of 1.2 million pounds to handle long strings of heavy casing for development wells that may slant out to 25,000 feet.

“The EW 834 Coelacanth project, despite significant obstacles, is a geologic, commercial and engineering success story which will have a meaningful impact for years to come,” states Jim Looke, Walter’s Vice President - Drilling & Production Operations.