Energy: Byron hits home run in the Gulf of Mexico

Byron Energy (ASX:BYE) has proved up a substantial hydrocarbon discovery at the Cutthroat prospect within its South Marsh Island 58 (SM58) lease in the Gulf of Mexico, with the company moving to suspend the SM58 011 BP01 well for future production.

The well intersected 300 feet of net hydrocarbon pay in the Upper O Sand.

Byron was still drilling through the high-quality Lower O Sand section with good oil shows before poor hole conditions prevented it from drilling deeper.

Mud log data indicated that the well had intersected a total hydrocarbon bearing interval of between 180 and 250 feet in the Lower O section.

While SM58 011 BP01 will be completed for production from the Upper O Sand through the proposed SM58 G platform, Byron flagged that the first development well to be drilled from the platform will be designed to test and produce from the Lower O section.

This well will be designed with much larger casing sizes and may be drilled with synthetic mud systems to help mitigate the drilling problems that the company had encountered while drilling the deeper section at SM58 011 BP01.

“The data collected from the SM58 011 BP1 Well has proved up a very substantial hydrocarbon accumulation that is transformational for our company,” chief executive officer Maynard Smith said.

“Of course, to develop this exciting opportunity we require funding and as indicated in our recent releases we are engaged in discussions with a number of financial institutions.”

“Based on indications we have had to date we are highly confident that we will be able to secure a suitable funding package.”

In more energy news:

Tap Oil (ASX:TAP) is preparing to kick-off an exploration drilling program of up to two wells, including a contingent side-track, at the offshore Manora project in the Gulf of Thailand in November.

The wells will target the Inthanin, Yothaka and Krissana prospects within 5km of the Manora platform, which could host combined best estimated prospective resources of 1.13 million barrels of oil net to the company, which has a 30 per cent working interest in the project.

Inthanin could be developed by deviated wells directly from the platform while development of the Yothaka and Krissana cluster will require a new wellhead platform tied back to Manora.

Operator Mubadala Petroleum is expected to make a final investment decision on the wells in October with Tap budgeting $US1.6m for its share of costs.

Empire Energy Group (ASX:EEG) is now focused on its Northern Territory operations after completing the sale of its Kansas assets to Mali Oil Operations for $US19.25m.

The proceeds were used to lower the company’s debt from $US24.81m to $US7.5m while the remaining US$1.5m will be used for its growth projects.

Empire is preparing to carry out a 2D seismic survey at its EP187 tenement in the Northern Territory.

Meanwhile, Liquefied Natural Gas (ASX:LNG) has received an environmental nod from the United States Federal Energy Regulatory Commission (FERC) in relation to its plan to increase the authorised production capacity of its Magnolia LNG plant from 8 million tonnes per annum (mmtpa) to 8.8mmtpa.

The FERC’s Draft Supplemental Environmental Impact Statement indicated that the company’s modifications associated with the proposed production increase would continue to avoid or reduce impacts to less than significant levels.

LNG is continuing to work with the FERC to ensure that the Final Environmental Impact Statement is received on schedule in January 2020.