American Oil and Gas Reporter - October 2015 - 152

SpecialReport: Gulf of Mexico Activity
The company, which employees 50 at offices in Dallas and
Houston, is in fact hiring, he reports. "We are in a growth mode,"
Reinsborough states. "We are hiring very selectively to parallel
our success. We are going to be very cautious not to overhire, but
now is a great time to invest in quality personnel and build the
company."
In keeping with the practices of its larger Gulf partners, Reinsborough says Venari is taking the long view and continuing to
build its deepwater portfolio.
"Like many major and large independent oil and gas companies, we tend to invest for the long-term value creation in these
projects," he relates. "We do not need to worry about the price
of oil today, considering that these projects take years to develop to the point of first production."
In It For The Long Term

First oil on some of the projects in which Venari Resources
holds interests is scheduled for 2019 and 2020, Reinsborough adds.
"We need to understand what the future forecast of oil prices will
be at the end of the decade, not next month. Because we are in
it for the long term, we invest through downcycles and upcycles.
That is what we are doing right now," he offers, noting that longrange forecasts call for West Texas Intermediate prices at the end
of the decade to range from $70 a barrel on the low side to $80
or more.
The company also continues to bid successfully on deepwater blocks, he points out. At the Central Gulf of Mexico Lease
Sale 235 last March, Reinsborough says Venari won 12 of the
13 high bids it submitted in partnerships with subsidiaries of
Chevron Corp., and separately with subsidiaries of Anadarko Petroleum Corp.
High bids included nine blocks close to Chevron's Anchor discovery in Green Canyon Block 807, which was announced earlier this year, he says. Venari has a 25 percent working interest
in the newest Green Canyon block additions with Chevron as operator holding 75 percent.
Reinsborough notes the Anchor-2 well was spudded in Au-

Houston Energy LLC and its partners were high bidders on 10
blocks in the Central Gulf Sale 235 last March, and the company is participating in nine deepwater wells this year, including
seven exploratory wells and two development wells.

152 THE AMERICAN OIL & GAS REPORTER

gust 2014 in 5,183 feet of water and drilled to 33,749 feet total
depth. It encountered a significant high-quality oil pay in multiple Lower Tertiary Wilcox sands. Chevron and its partners are
back on location at Anchor and have drilled a bypass well. As
of mid-September, more than 600 feet of conventional core had
been collected, Reinsborough details.
Venari also is partnered with Chevron in the Guadalupe and
Sweetwater fields. "We continue to be in growth mode in the deep
water," Reinsborough states. "The partnership with Chevron is
one illustration of how we can continue to grow our asset base
around our discoveries. We have several discoveries now with
Chevron. We are back on location on two of them drilling the fields
in appraisal mode."
The company also is participating in ongoing appraisal
drilling work at the Anadarko-operated Shenondoah Field, he adds.
Venari's high bids at Central Gulf Sale 235 included Walker Ridge
blocks 98, 99 and 143 in proximity to Anadarko's Coronado discovery, Reinsborough says.
The company's financial position will help stay the course,
he adds. Venari raised $1.4 billion in equity commitments in the
summer of 2014, and Reinsborough says that equity commitment
had "barely been touched" by the end of the third quarter of 2015.
The company secured a $1.1 billion line of equity when it was
formed in May 2012.
"We are just now getting into that second draw in equity to
fund the program going forward," Reinsborough explains. "Our
investors also view the deepwater Gulf as an opportunity to invest during cycles. This is a long-term business for value creation,
and our investors understand the time cycles in deep water and
are aligned with our philosophy."
Generating Prospects

Houston Energy LLC continues to generate prospects in the
deepwater Gulf and partner with companies attracted to its large
volumes of 3-D seismic data, existing infrastructure with known
royalty scales, and the ability to participate and succeed in bidding in state and federal waters, says William Flores Jr., senior
vice president of engineering.
The company has assembled more than 5,100 blocks of 3-D
seismic data in the Gulf of Mexico and continues to employ stateof-the-art seismic modeling, amplitude-variation-with-offset, and
inversion techniques to qualify and quantify prospects, he says.
Houston Energy and its partners were high bidders on 10 blocks
in Central Gulf Sale 235 last March. "We bid on blocks with partners, and go out to the industry and sell the prospects to operators," he explains. "We will find a company that is operating in
deep water that is looking for prospects."
The company and its partners had planned to drill at least two
Shelf targets this year, but those prospects have been put on hold
temporarily until prices recover somewhat, Flores says. So Houston Energy's primary focus remains on deep water. The company is participating in nine deepwater wells this year: seven exploratory wells and two development wells.
"The first well started drilling this summer, followed by five
in the third quarter and the other three in the fourth quarter," Flores reports.
Successes include Delta House, operated by LLOG Exploration



American Oil and Gas Reporter - October 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - October 2015

Contents
American Oil and Gas Reporter - October 2015 - Cover1
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