American Oil and Gas Reporter - April 2018 - 116

SPECIAL REPORT: GULF OF MEXICO
The next step in LLOG's operational
evolution is clear: pushing into the Lower
Tertiary Wilcox trend. And it is making
that move right now with its ultradeepwater
Buckskin development project in the Keathley Canyon area. The Lower Tertiary Wilcox
is the most complex trend the Gulf can
muster up, with water depths to more than
10,000 feet, drilling depths as great as
35,000 feet, an extensive salt canopy covering
90 percent of the play, and characteristically
high pressures and temperatures. However,
the prize is considerable, with per-field reserves estimated in the billions of barrels
of oil equivalent range from large deposits
of carbonate and clastic sediments.
"Buckskin was discovered several
years ago by Repsol (the exploratory operator), Chevron and Maersk Oil. Chevron
became development operator, but the
reserves did not meet its requirements to
sanction development," says Rick Fowler,
LLOG's vice president of deepwater projects. "We recognized its potential and
began working on a development concept
that made sense for us."
So now LLOG Exploration's push into
the Lower Wilcox takes the company into
the Gulf's final frontier, and exemplifies
the same strategy that has contributed to
its success over the years in Gulf projects.
In layman's terms, it goes like this: Find

an opportunity where other companies
may not see one (or in the case of Buckskin,
no longer see as economic), make a conscious decision to acquire the asset, and
then figure out how to rapidly advance
the project from acquisition to development
to production using proven, standardized
technologies and methods.
"Buckskin is a unique opportunity,"
Fowler offers. "It is also an opportunity
for us to apply the same approach we
have used successfully for years in the
Gulf of Mexico to develop our first Lower
Tertiary Wilcox project."
There actually are a number of things
that make Buckskin unique: its location,
its size, the amount of data LLOG inherited, and even the financing, according
to Fowler. But as Fowler mentions, the
company also is eyeing the future, and
he points out that by demonstrating it
successfully can apply its low-cost, highefficiency development model in the
Lower Tertiary play, LLOG is counting
on Buckskin to open a number of additional opportunities down the road.
"Buckskin is a significant milestone for
us, given the size of the field and the fact
that it is our first Lower Tertiary Wilcox
development. We are looking forward to
the successful completion of the project
and are excited about the potential of Buck-

Buckskin is LLOG Exploration's
first development project in the
Lower Tertiary Wilcox trend. The
first phase of the project is now
under way to drill and complete
two initial development wells at
total depths of 29,000 feet in the
field's northern fault block. Subsea facilities then will be installed to tie the wells back six
miles to the Anadarko-owned
Lucius spar platform stationed
at Keathley Canyon 875. In subsequent phases, LLOG expects
to drill and complete as many as
12 additional wells.

116 THE AMERICAN OIL & GAS REPORTER

skin and other opportunities in the play."
Another thing that makes the project
noteworthy for LLOG is the estimated
size of its reserves. Buckskin is located
in 6,800 feet of water in Keathley Canyon
blocks 785, 828, 829, 830, 871 and 872.
The reservoir depth ranges from 26,000
to 28,000 feet true vertical depth, and
Fowler says LLOG estimates that the hydrocarbon column height could be in excess of 2,000 feet.
"Buckskin is big," Fowler enthuses.
"We are looking at Buckskin containing
5 billion barrels of oil equivalent in place.
I, for one, have never worked on a field
that has had that order of magnitude. An
original oil in place estimate of 5 billion
boe is very substantial by our standards."
Mitigating Risk
Another very compelling factor that
helped sell LLOG on Buckskin was the
fact that the previous operator, Chevron,
and its partners had spent seven years
and more than $1 billion delineating and
exploring the field, Vice President of Geology Eric Zimmermann relates.
After its discovery in 2009, Chevron
and partners, Repsol and Maersk Oil,
considered developing the field both as
a standalone hub and as a subsea tieback.
However, in early 2016, with West Texas
Intermediate spot prices hovering around
$30, Chevron made the call to write off
Buckskin. Chevron's decision opened
the door to LLOG, and meant that it
could come into a project where there
was already a tremendous amount of
geophysical, geological, logging and core
data. Repsol persisted with the project,
eventually taking on LLOG as operator.
As a result, LLOG had no sunk costs,
and going forward, the company is only
paying for its share of the development,
according to Zimmermann.
Two affiliates of LLOG, Buckstone Development Company LLC, and LLOG
Deepwater Development Company I LLC,
own a combined 33.8 percent working interest in the Buckskin development, and
LLOG Exploration Offshore LLC is operator of the project. Additional partners are
Repsol E&P USA Inc. (22.5 percent), Beacon Offshore Energy Buckskin LLC (18.7
percent), Navitas Buckskin U.S. LLC (7.5
percent), and two entities managed by
Ridgewood Energy Corporation, Ridgewood
Buckskin LLC and ILX Prospect Buckskin
LLC, each with 8.75 percent.



American Oil and Gas Reporter - April 2018

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Contents
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