McMoRan: Gas From Shelf Can Get To Market Quicker

While gas supplies are now in surplus and prices are low, the recent history of the commodity shows that when a heated economy burns up supplies, prices can spike quickly.

New Orleans-based McMoRan has rights to 1.2 acres on the shelf and onshore in the Gulf Coast area, including 227,000 acres that are considered ultra-deep, such as an exploratory well that has been drilled to just under a record 33,000 feet below the bottom of the Gulf. McMoran said it is making plans for a production test of the site. That well was initially drilled by Exxon Mobil Corp., but the company suspended the operation and McMoRan took it over.

At least two other deep drilling projects have been started by McMoRan on the shelf — one which will reach 24,500 feet and the other targeted for a depth of 19,500 feet.

Moffett said that possible deep gas finds are already close to existing pipelines, meaning that only a year to 18 months would be required to bring economically produceable deposits to market. In the deepwater regions of the Gulf, which McMoRan has shunned, up to seven years is typically projected as the time from drilling to market.

McMoRan hit pay dirt with its discovery of the Flatrock Field, located just off the central Louisiana coast, in July 2007. There are currently four producing wells on the site, with another two expected to start production in 2009. Current production from the field is about 230 million cubic feet per day.