Insurance confirms coverage of GulfSlope’s Tau well claim

Houston-based GulfSlope Energy has announced an insurance claim related to its well on the Tau Prospect, located in the U.S. Gulf of Mexico, which had to be abandoned without reaching targeted depth. 

GulfSlope announced on Tuesday that underwriters associated with the company’s Energy Package insurance policy had acknowledged confirmation of coverage, subject to the policy terms and conditions, related to a subsurface well occurrence that happened during the drilling of the company’s Tau well earlier this year.

To remind, GulfSlope was forced to abandon the well at the Tau Prospect without reaching targeted depth. The well was drilled using the Ralph Coffman jack-up rig, now known as Valaris JU-117.

This occurrence transpired on May 5, 2019, during drilling operations at a measured depth of 15,254 feet as compared to the originally permitted 29,857 foot measured depth. Producible hydrocarbon zones were not established to the current depth, but hydrocarbon shows were encountered.

The company subsequently controlled the occurrence and ceased drilling operations. Plugs were placed in the well to meet regulatory requirements prior to rig release.

It is also worth reminding that company had elected to abandon this well in a manner that would allow for re-entry at a later time.

Pursuant to the policy terms and conditions, the underwriters will reimburse GulfSlope for qualified actual costs and expenses incurred to regain control of the well, and restore or re-drill the well to 15,254 feet. GulfSlope is working with the underwriters to finalize details associated with the claim.

“GulfSlope was encouraged by what we saw in the geologic section penetrated below salt in the initial wellbore. We are looking forward to drilling deeper and testing the large and very exciting exploration potential in the Tau Prospect,” stated John Seitz, Chairman and CEO of GulfSlope.

“We are conducting pre-drill activities, reviewing the Exploration Plan, and preparing, in coordination with the insurers, the Application for the Permit to Drill.”

The Tau Prospect targets multiple Miocene sand levels trapped against a well-defined, angled flank of the large salt structure. The correlative target subsalt Miocene sand levels are oil productive at the nearby subsalt Mahogany Field, located approximately five miles to the southwest. The company estimates that a projected 26,000 foot total vertical depth will test gross resource potential of 400 million barrels of oil equivalent for the Tau Prospect.

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