January 2010

US Atlantic Outer Continental Shelf Exploration, Revisited?

Michael Cornyn, Geophysicist, Stone Energy, P.O. Box 52807, Lafayette, LA 70505

Abstract Summary

The correlation of high national per capita income versus high energy consumption is well documented. The United States is in a league by itself with both a high national per capita income and also high energy consumption. According to the US Energy Information Agency, approximately 61 percent of the United States energy needs come from oil and gas. Yet most of the US Outer Continental Shelf (OCS) is off limits to oil and gas exploration. This talk is about one of those areas, the Atlantic Outer Continental Shelf (OCS). The Atlantic OCS extends from Maine to the western tip of the Florida Keys (approximately 1900 miles). This OCS area covers approximately 270 MM acres which is an area equal to 11% of the continental US. The first Atlantic OCS exploration wells were drilled off of Dry Tortuga (Florida Keys) in 1959, not until 1976 did the US Government have its first OCS lease sale (Sale 40) off the coast of New Jersey. Between 1976 and 1988 the federal government had 10 lease sales. The oil and gas industry responded with 49 exploration and 5 Continental Offshore Stratigraphic Test (COST) Wells. Over $3.5 B (1980’s dollars) was spent and no commercial oil or gas reserves were found. In 1988 a Presidential Executive Order from President Clinton, set a blanket moratorium on oil and gas exploration on all OCS lands not previously explored until June, 2012. This shut the Atlantic OCS down.

In 2005 Deep Panuke Field on the Scotia Shelf of the Canadian Atlantic Offshore was discovered. This EUR 892BCF upper Jurassic carbonate field provides an analog for the Atlantic OCS where a number of shelf edge leads exist, including the infamous Manteo Production Unit off the coast of North Carolina. The Manteo Production Unit is a carbonate build up which a consortium of companies lead by Chevron tried unsuccessfully to drill in early 1990’s, but was denied by changing Federal regulations. Compilation of MMS data, addition of the Deep Panuke Field Analog and the location of the Atlantic OCS with respect to one of the world’s largest gas markets, bodes well for another round of exploration in the Atlantic OCS. But government environmental regulations, special interest groups against Atlantic OCS exploration, and costs associated with drilling and development could prevent a second exploration campaign. If gas prices do warrant it, any chances of a second exploration campaign may hinge on public opinion.

Biographical Sketch

Michael Cornyn grew up in a suburb of Dayton, Ohio. He a graduate from Wright State University with a BS (1974) and MS (1977) in Geology. He worked for Union Oil Company of California from January, 1977 through 1992. While there he worked on projects from the Black Warrior Basin, Mississippi Salt Basin, Louisiana Onshore and State Waters, to the Federal Offshore Sales. He also spent five years managing a dedicated Digicon seismic processing department for UNOCAL in Lafayette. In 1993 he moved to The Exploration Company of Louisiana. While there he worked on projects in the South Texas Miocene, Bohai Bay, and Shaanxi Province, People’s Republic of China. For several months in 1996 he worked for GeoQuest at Conoco in Lafayette as a Unix Software Support person. By 1997 he joined Sonat in Houston and worked as a Geophysicist on their Onshore Salt Dome Team. While there he “bird dogged” the acquisition and processing of the Iberia Dome 3D and the Welsh-Woodlawn-Iowa Dome I10 3D. In 1998 he moved back to Lafayette with Petsec. There he worked on both onshore and offshore federal sale projects. After Petsec’s economic fortunes crashed he got an opportunity with Stone Energy. He is there presently and has worked on a wide range of projects from GOM shelf to deep water, Bohai Bay, to Marcellus Shale.