McMoRan Exploration Co. (NYSE: MMR) shares climbed 11.5% to $18.48 Wednesday, after the oil producer said data from four wells pointed to the possibility of large accumulations of crude oil and natural gas in the Davy Jones prospect in the Gulf of Mexico. Shares in the company totaled 8.2 million, or about four times its normal daily volume average.
A news release announcing the find on June 29 indicated that McMoRan has actively pursued large ultra-deep targets located in the shallow waters of the GOM below the salt weld (i.e. listric fault) at depths generally below 25,000 feet since 2008. The data gained to date from four wells confirms McMoRan’s geologic model and the highly prospective nature of this emerging geologic trend.
Prior to McMoRan’s involvement in the ultra-deep, there had been only two wells drilled on the Shelf targeting these objectives; one did not reach its targeted depth and the other was outside of McMoRan’s focus area. Importantly, McMoRan’s results to date have indicated the potential for large accumulations of hydrocarbons at these deeper depths in the shallow waters of the GOM, which is expected to reduce the risk of future activities.
The Davy Jones offset appraisal well (Davy Jones No. 2), located on South Marsh Island Block 234, two and a half miles southwest of the Davy Jones No. 1 discovery well, was drilled to a total depth of 30,546 feet. As reported in February 2011, preliminary log results above 27,300 feet confirmed hydrocarbon bearing Wilcox sands with continuity across the major structural features of the Davy Jones prospect.
The release did not quote officials of the company.
McMoRan Exploration Co., headquartered in New Orleans, is an independent public company engaged in the exploration, development and production of natural gas and oil in the shallow waters of the GOM Shelf and onshore in the Gulf Coast area.