McMoRan Exploration Offers Update on Davy Jones No. 1
McMoRan Exploration Co. (NYSE: MMR) provided an update on the Davy Jones No. 1 operations currently in progress on South Marsh Island Block 230. As previously reported, the well was opened for testing in November 2012. Completion fluids were recovered from the well but flow was believed to be restricted by residual barite in the perforations (i.e. skin or formation damage). Barite is a heavy component of drilling mud that was used to suppress flow of the well.
Recent operations to stimulate the well by injecting a solvent to dissolve the barite had limited success as a result of insufficient contact of the barite with the solvent. McMoRan is initiating operations to use a propellant stimulation gun to create fractures that will extend beyond the suspected formation damage to attempt to unblock the perforations and if necessary McMoRan may inject additional solvent to make contact and dissolve the barite. McMoRan will provide updates as flow testing operations progress and a measurable flow test is achieved.
Davy Jones involves a large ultra-deep structure encompassing four OCS lease blocks (20,000 acres). McMoRan is the operator and holds a 63.4 percent working interest and a 50.2 percent net revenue interest in Davy Jones. Other working interest owners in Davy Jones include: Energy XXI (NASDAQ: EXXI) (15.8%), JX Nippon Oil Exploration (Gulf) Limited (12%) and Moncrief Offshore LLC (8.8%).
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