ONSHORE GULF COAST
The Company is focused in the Frio and Vicksburg trends in Texas and
in the Miocene and expanded Oligocene trends in South Louisiana.
These trends are attractive to the Company due to its experience and
expertise, the high rates and recovery per well, and the
availability of 3-D seismic which assists in reducing risk
associated with drilling the initial test wells. The prospects in
these trends are supported by 3-D seismic and typically exhibit
seismic attributes consistent with hydrocarbon charged reservoir
rock at one or more objectives. These attributes combine to yield
high success rates and positive economics. The Company has had a
successful exploration program in the Gulf Coast area for over 10
years.
Galveston Bay and Sabine Lake are primary focus areas for the
Company in Galveston, Chambers and Jefferson Counties in Texas.
Prospects generated by the Company have resulted in discoveries in
the Eagle Bay, Vinceburg, Umbrella Point, Dorado and Pleasure Island
areas.
Southeast Louisiana is also a primary focus area for the Company
across the Vermillion, Jefferson Davis and Lafayette Parishes. The
Company's prospects in this area have resulted in recent discoveries
at Leleux, Lake Arthur and Duson from the Het through the Bol Mex
formations.
DEEPWATER GULF OF MEXICO
The Deepwater Gulf of Mexico is a premier exploration province
primarily due to the target reservoir sands, availability of high
quality 3-D seismic data, infrastructure, product markets, fiscal
terms and access to acreage. The high quality 3-D seismic data, the
rock properties and the depths of targets allow the seismic data to
reveal Direct Hydrocarbon Indicators in the section above the salt.
Davis Offshore L.P. engages primarily in the business of natural gas
and oil exploration and production in the Outer Continental Shelf of
the Gulf of Mexico. The Company, through its wholly owned
subsidiary, believes the current environment in the Deepwater Gulf
offers an excellent opportunity for medium to smaller sized
independents. The Company is focused on generating exploration and
exploitation prospects offshore Louisiana in depths of 500 to 6,000
feet of water. The presence of existing and emerging production
facilities and infrastructure in this area improves the economics of
prospecting for these large reserve targets.
The Company entered this area in September 2000 and is focused on
the Primary Basin deepwater province where existing infrastructure
results in lower development capital costs and reduced lead time to
first production. The Company owns approximately 1,350 blocks of 3-D
seismic data in this trend, including the Garden Banks, Green
Canyon, Ewing Band, Mississippi Canyon and Viosca Knoll areas. The
3-D seismic data assist the Company in generating prospects to be
acquired in the U.S. Department of the Interior Minerals Management
Service's federal lease sales as well as securing farm-in rights on
existing leased acreage. Due to the recent turnover of Federal Outer
Continental Shelf leases, the Company has accumulated a substantial
inventory of prospects with the expectation of drilling three to
four exploratory wells annually over the next four to five years.
To date, the Company has had four discoveries in the deepwater, all
within Green Canyon. Two of the discoveries, GC199 (Lorien Field)
and GC157 (JBellis Field), are currently producing from five subsea
development wells. The wells at Lorien Field and JBellis Field are
evacuated through permanent facilities of Shell at Bullwinkle and
Brutus, respectively. Lorien Field was started in April 2006 and
JBellis Field was discovered in June 2003 with first production in
June 2005.
The third discovery is GC299/GC300 (Clipper Field). The project has
been sanctioned with the U.S. Department of Interior Minerals
Management Service in 2008 with first production scheduled in 2010.
The fourth discovery is GC448 (Condor Field). Drilled by LLOG in
2007, the field is planned to tie back to the Marquette
infrastructure in 2010.
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