American Oil and Gas Reporter - June 2015 - 103

SpecialReport: Offshore & Subsea Technology
operates Who Dat with 50.25 percent interest in the project.
Gutterman says most of the wells employ smart completions, which he describes as sliding sleeves that the company
can operate mechanically to open and
shut zones.

Additional Activity
Although the downturn in commodity
prices means lower cash flow, Gutterman
says LLOG has not modified its budget
significantly. "We are managing our
budget by deferring one or two developments and re-evaluating a couple of
smaller projects that are marginal at
current prices," he allows.
The company has three deepwater rigs
under contract. "We will retain and continue working our two new-build, dynamically positioned rigs (Sevan Louisiana
and Seadrill West Neptune) and release
our moored rig (Noble Amos Runner)
when it terms out in the fourth quarter,"
Gutterman states.
He says one has to think long-term in
the deepwater Gulf of Mexico. "Typical
developments in the deep water produce
for 10-25 years. While we expect price
volatility to have some impact on shortterm margins, full cycle economics are still
very robust. We try not to overreact when
commodity prices drop," he explains. "We
have worked hard to build a healthy liquidity
cushion that allows us to fund our current
budget comfortably, and potentially consider
new opportunities that are often a byproduct
of these down cycles."
LLOG is active in a number of other
areas as well. Gutterman says much of its
activity is related to the Delta House floating
production system in Mississippi Canyon,
which initiated first production in midApril of this year (see story page 88).
"We have drilled seven wells in the
primary fields that feed our Delta House
facility, and have two additional nearterm development wells planned for
2015," he observes. "Five of those wells
had been brought on line by mid-May.
Two more will see first production by
late summer, and the two additional development wells will be brought into the
facility within the next six to eight months.
Another discovery, Otis, is scheduled to
be tied back by mid-2016."
LLOG has continued to see success
outside of the Delta House and Who Dat
developments, Gutterman continues. It
has drilled a second well at the Taggart
discovery, which encountered approxi-

mately 150 feet of net pay, and will be
tied back to the Devil's Tower spar. LLOG
also has a nonoperated interest in the
Kodiak Field, which is expected to begin
producing in the fourth quarter, Gutterman
says.
LLOG also brought on line two South
Timbalier wells with gas condensate pay
in its operated Powerball Field in 226
feet of water, 115 miles south of New
Orleans. He says those two wells are

producing 1,000 bbl/d oil and 40 MMcf/d
of natural gas.
Gutterman calls OCS Lease Sale 235
"a light sale, by level of activity."
"We moderated our approach," he acknowledges. "We were a bit conservative,
but were pleased with the blocks on
which we were high bidder. Some fit
nicely into our areas of focus, while
others are stand-alone blocks, and a couple
are support acreage."
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JUNE 2015 103

American Oil and Gas Reporter - June 2015

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