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Whether it is discovering the Jubilee field offshore Ghana or going against the exploration grain in Cameroon and Morocco, Kosmos Energy’s success is very geologically focused on the rocks.
Follow the rocks. Kosmos Energy makes a habit of approaching its exploration efforts backwards to what many other companies do.
“We are very much into the rocks in which we drill and into understanding that as part of the process by which we acquire acreage,” said Greg Dunlevy, executive vice president and chief financial officer, Kosmos, at the Jefferies 2011 Global Energy Conference on Dec. 1. “We go from the bottom up -- source, reservoir and trap in that order.”
The company also focuses on emerging and frontier systems as opposed to mature basins. Its main emphasis is on West Africa and a Late Cretaceous theme.
“We are very oil focused in our exploration and new venture activities,” he emphasized. “We expand within existing geographies on geological themes and on the knowledge base we have. At the same time, we’re looking to extend our themes and new geographies.
“We’re working both sides of the Atlantic margin looking for opportunities that meet our criteria. We are continuing to expand and put ourselves in position to drill two to three play-opening wells per year,” he continued.
As an example after the conference, the company executed two production sharing contracts (PSCs) with Staatsolie Maatschappij Suriname NV, the national oil company of Suriname, for offshore Blocks 42 and 45. This represents Kosmos’ first acreage outside West Africa. The company is operator and owns 100% interest in both blocks that covers about 3.0 million acres. The first well will likely be drilled in 2014. The concept is an extension of the Upper Cretaceous stratigraphic play system that the company unlocked on the West African side of the South Atlantic Transform Margin.
“We focus on unlocking petroleum systems, and I differentiate that from finding an oil field,” he explained. “Once we find such a petroleum system and unlock it, we focus on evaluating, appraising, expanding and and producing it. And, more importantly, it’s finding a lot more fields.”
Ghana is a classic example of the approach. The company has interests in two offshore blocks – Deepwater Tano (18%) and West Cape Three Points (30.875%). The Jubilee field, which was discovered in 2007, extends across the boundary of the two blocks. The field’s gross resources are estimated between 600 million and one billion barrels of oil equivalent.
“Jubilee is a very profitable asset with very high cash flow margins,” he noted. “The net to Kosmos is about $1 billion per year. And, there are seven other discoveries.”
The Enyenra discovery on the Deepwater Tano block was made in 2010. The field will be developed with a floating, production, storage and offloading (FPSO) vessel. The project is expected to be sanctioned in the first half of 2012.
“Several exploration wells will be drilled in 2012. We will have a test stripping operation for gas/condensate accumulations in Tano. We expect first production from our second FPSO in late 2014 or early 2015,” Dunlevy said.
On the eastern West Cape Three Points block, Kosmos drilled a successful appraisal well at its Teak field and added a discovery with its Akasa well.
“The Teak-3 well confirmed the structural component of the field with over 100 ft of net pay. There is significant upside at Teak. We plan to drill Teak-4 early next year and probably Teak-5,” he continued.
In addition to Teak and Akasa, the company discovered the Mahogany East field in 2008.
“We want to combine these three areas into one FPSO development. The goal is to advance the appraisal of these blocks and then we can start planning in detail the characteristics of the FPSO vessel. There’s still a good bit of exploration going on. We expect to drill two to three exploration wells in addition to all of the appraisal wells,” he continued.
The company also has two sizeable blocks in Cameroon – Ndian River and Kombe-N’Sepe. The reverse exploration attitude is present here as well. In the Kombe-N’Sepe Block there is an Upper Cretaceous play offshore.
“Most people don’t think about going onshore with an offshore idea. Again, we’re being unconventional. We believe it comes onshore. In the Ndian River Block, we believe it is an onshore extension of the Alba trend. We think it is a 100-million-barrel prospect. There are several very similar projects there. We expect to be drilling a well next year as we work around the rainy season in Cameroon,” he explained.
The other area Kosmos is targeting is offshore Morocco. The company expects to drill a number of wells in the country in 2013, which could be part of a multi-well program. The company is excited about the prospect.
“We believe this will be as prolific as the Gulf of Mexico, but we have to do some exploration first. There is a fair amount of salt structure here. It is still the Cretaceous, but we’re focused on adding a new element of play diversity by bringing the salt in,” he emphasized.
From its seismic data, Kosmos identified structures that are similar to what can be seen in the Gulf of Mexico.
The company also recently entered into a reconnaissance contract for the Tarhazoute Block offshore Morocco. The block covers 1.9 million gross acres in water depths of between 3,250 and 8,200 ft. It is located offshore in the Agadir Basin immediately between the company's Essaouira and Foum Assaka Blocks.
Kosmos will be the operator with a 100% working interest. The contract has a one-year term, after which the company has the right to enter into a petroleum agreement for the acreage. Kosmos will initially reprocess existing 2D seismic. The company also has the Cap Boujdour Block.
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