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Stone Energy Hits Wet Gas During Rampart Deep Drilling

Stone Energy Corp. (NYSE: SGY) reported the Rampart Deep well encountered about 130 net feet of liquids-rich natural gas pay in three primary zones on Sept 5. Stone generated the prospect and owns a 40% non-operated working interest in the well.

The Rampart Deep well is located in the Mississippi Canyon in Block 16 and is operated by Deep Gulf Energy III, LLC.

In addition to the reserve potential of Rampart Deep, this well also provides critical information that reduces the exploration risk of Stone’s Derbio prospect, which is positioned up-dip from Rampart Deep and located one block to the northwest in Mississippi Canyon Block 72.

The completion of the Rampart Deep well will be deferred while the partners analyze the well data and will be further evaluated in conjunction with future Derbio drilling results. Drilling plans for Derbio will be reviewed with the Rampart Deep partners over the next 90 days.

If Derbio is successful, first production from the Rampart Deep/Derbio project is expected by late 2019 and could be a multi-well tie back to the Pompano platform, which is owned 100% by Stone.

“The Rampart Deep well is encouraging to Stone as this discovery provides us with potential future reserves as well as important information that should reduce the risk of our other prospects in the area, particularly the Derbio prospect,” interim CEO and President James M. Trimble said.

“The discovery at Rampart Deep, along with a success at Derbio, would allow us to further leverage our infrastructure position at our Pompano platform by generating additional production and cash flow with minimal incremental operating cost,” Trimble said.

Working interest partners in the Rampart Deep well are Deep Gulf Energy III, LLC with 30% and entities managed by Ridgewood Energy Corp., including Riverstone Holdings, LLC and its portfolio company ILX Holdings III, LLC, with 30%.

Stone currently holds a 100% working interest in the Derbio prospect, but the Rampart Deep partners may elect into the Derbio well for a 60% total working interest, proportionate to their respective Rampart Deep working interests, with the remaining 40% owned by Stone.