Nexen Inc. announced that it has entered into an agreement with Shell Exploration and Production Company (SEPCo) to jointly explore a 1,044 square mile area of the Continental Shelf of the Gulf of Mexico for natural gas in Miocene reservoirs.
The area of mutual interest (AMI) outlined in the agreement consists of 116 blocks located in Ship Shoal and South Timbalier. Within this area, Nexen has the right to earn a 40% working interest in any acreage acquired by SEPCo and SEPCo has the right to earn a 60% interest in any acreage acquired by Nexen. The first well drilled under the agreement will be a test of the Fergana prospect located on South Timbalier 239 and 248 blocks, approximately 115 miles south of New Orleans in 210 feet of water. Under the terms of the participation agreement, Nexen will earn a 40% interest in Fergana. Drilling operations are expected to commence in late-May and the well is expected to take approximately 140 days to reach a total depth of 22,500 feet.
