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Goodfellow prospect is a 3-way closure against a salt weld trap located in Keathley Canyon Blocks 129, 173 and Walker Ridge
Blocks 89, 90, 133. The Goodfellow prospect is located approximately 18 miles southwest of our Shenandoah discovery in the
Walker Ridge area. We expect results from the Goodfellow #1 exploration well in the second half of 2016. We are the operator and
currently own a 47% working interest in the Goodfellow prospect. Prior to spudding the Goodfellow #1 exploration well, our working
interest may change depending upon the participation elections of the other working interest holders in the Goodfellow prospect.
Anchor South
. We believe potential exists for the Anchor reservoir to extend south onto Green Canyon Blocks 850 and 851
which we operate and have working interests of 100% and 70%, respectively. We are evaluating a potential exploration well that will
target Inboard Lower Tertiary horizons on such blocks, which if successful may cause those blocks to be included within the Anchor
discovery unit thereby increasing our working interest in the Anchor discovery unit.
In addition to the Goodfellow and Anchor exploration wells listed above, we are also continuing to mature our current
exploration prospect inventory across the broader deepwater U.S. Gulf of Mexico, which includes potential future exploration drilling
at our South Platte and Rocky Mountain prospects. See “Risk Factors—Risks Relating to Our Business—Our drilling and
development plans are scheduled out over several years, making them susceptible to uncertainties that could materially alter their
occurrence or timing.”
General Information
Our U.S. Gulf of Mexico operations target oil-focused prospects in the subsalt Miocene and Inboard Lower Tertiary horizons in
the deepwater U.S. Gulf of Mexico.
Geologic Overview
The subsalt Miocene and Inboard Lower Tertiary horizons in the deepwater U.S. Gulf of Mexico are characterized by well-
defined hydrocarbon systems, comprised primarily of high-quality source rock and crude oil, and contain several of the most
significant hydrocarbon discoveries in the deepwater U.S. Gulf of Mexico in recent years.
Miocene.
The subsalt Miocene trend is an established play in the deepwater U.S. Gulf of Mexico. Discoveries in this trend
include Thunder Horse, Atlantis, Tahiti, Mad Dog, and Stampede. This trend is characterized by high quality reservoirs and fluid
properties, resulting in high production well rates.
Inboard Lower Tertiary.
The Lower Tertiary horizon is an older formation than the Miocene, and, as such, is generally deeper,
with greater geologic complexity. The industry has been successful in terms of locating and drilling large hydrocarbon-bearing
structures in this interval. The reservoir quality of the Lower Tertiary has proven to be highly variable. Some regions, including those
areas in which many of the historical Lower Tertiary discoveries have been made, exhibit lower permeability and generally lower
natural gas content compared to the Miocene horizon.
However, a sub-region in the Lower Tertiary that has exhibited reservoir characteristics more similar to that of existing Miocene
discoveries is the Inboard Lower Tertiary trend, which includes our oil discoveries at North Platte, Shenandoah and Anchor. The
Inboard Lower Tertiary is a trend located to the north of existing Outboard Lower Tertiary fields such as St. Malo, Jack and Cascade,
which are all on production from the Lower Tertiary. We were an early mover in the Inboard Lower Tertiary trend, targeting specific
lease blocks as early as 2006. We believe our Inboard Lower Tertiary prospects are characterized by large, well-defined structures of a
similar size to Outboard Lower Tertiary discoveries, but are differentiated by what we believe to be better reservoir quality and energy
based upon data from wells drilled at our North Platte, Shenandoah and Anchor discoveries. We believe we hold a significant
leasehold position in the Inboard Lower Tertiary and, to date, have had an exploration success rate of 60% in the Inboard Lower
Tertiary.
Exploration Prospect Maturation Process
The process of maturing an exploration prospect from initial identification to drill-ready status begins with analyzing regional
data, including industry well results, to understand a given trend’s specific geology and defining those areas, or “prospects,” that offer
the highest potential for substantial hydrocarbon deposits while minimizing geologic risks. After these prospects are identified, we
further mature our prospects by acquiring and reprocessing high resolution seismic data available in the potential prospect’s direct
vicinity. This includes advanced imaging information, such as wide-azimuth studies, to further our understanding of a particular
prospect’s characteristics, including both trapping mechanics and fluid migration patterns. Reprocessing is accomplished through a
series of model building steps that incorporate the geometry of the salt and below salt geology to optimize the final image. In addition,
we gather publicly available information, such as well logs, which we use to evaluate industry results and activities in order to
understand the relationships between industry-drilled prospects and our portfolio of undrilled prospects. As part of the maturation of a
