BP Announces Significant Oil Discovery In Gulf Of Mexico - Quick Facts

(RTTNews) - BP Plc (BP.L, BP_UN.TO, BP) Wednesday said it has made a significant oil discovery at its Gila prospect, which it co-owns with ConocoPhillips (COP), in the deepwater US Gulf of Mexico.

The Gila discovery was made by an exploration well on Keathley Canyon Block 93, about 300 miles southwest of New Orleans, in about 4,900 feet of water. The well, which penetrated multiple Paleogene-aged reservoir sands, was drilled to a total depth of 29,221 feet. Appraisal drilling, including completion of drilling through the Paleocene section, will be required to determine the size and potential commerciality of the discovery.

Gila is some 25 miles to the west of Tiber. BP is operator and holds an 80 percent interest in the discovery well.

This is BP's third discovery in recent years in the emerging Paleogene trend in the Gulf of Mexico. BP has previously announced two other Paleogene discoveries in the Gulf of Mexico - Kaskida in 2006 and Tiber in 2009. Further, the oil giant said 2013 had been its most successful year for new field exploration for almost a decade.

BP also confirmed the recently-announced Pitu oil discovery in the frontier deepwater of the Potiguar basin off Brazil's equatorial margin, announced yesterday by Petrobras.

Additionally, BP said the BP-operated Pitanga exploration well on Block BM-CAL-13, in the Camamu-Almada basin offshore Brazil, had encountered oil shows but no commercial quantities of oil or gas. This result will cause BP to relinquish the BM-CAL-13 block.

The Pitanga well result will trigger a write-off of around $230 million related to the costs of drilling the well, as well as a write-off of around $850 million associated with the value allocated to this block as part of the acquisition accounting related to the Devon deal.