Leon (KC642) - LLOG

Profile for Leon (KC642) - LLOG Oil Project

Location

The Leon (KC642) oil project is located in the Keathley Canyon protraction area of the Central Gulf of Mexico, approximately 250 miles southwest of New Orleans. Specifically, it is situated in blocks KC 642, 643, 686, and 687, at a water depth of about 6,000 feet (1,828.8 meters).

Discovery and Operator

The Leon discovery was made by Repsol in October 2014. The discovery well was drilled to a total depth of about 32,000 feet and encountered nearly 700 feet of net oil pay in multiple sands in the Lower Tertiary formation. In February 2019, LLOG Exploration assumed operatorship over the Leon field.

Project Details

• Status: The project is currently in development, with the Final Investment Decision (FID) made in 2022. Production is expected to start in mid-2025.
• Partners: The project is a joint development between LLOG Exploration Offshore, Repsol E&P USA Inc., and Beacon Offshore Energy LLC.

Reserves and Production

• Reserves: The Leon field has estimated reserves of 90 million barrels of oil equivalent (boe) as of 2023.
• Production Capacity: The Salamanca production facility, which will serve the Leon and Castile fields, is expected to have a capacity of 60,000 barrels of oil per day (bopd) and 40 million cubic feet of natural gas per day.

Development Plan

• Wells: The initial development will involve three subsea wells, with two wells planned for the Leon field and one for the Castile field. These wells will be tied back to the Salamanca Floating Production Unit (FPU).
• Salamanca FPU: The production facility will be created from the refurbishment of a previously decommissioned production unit. This approach reduces the time and cost compared to building a new facility and also lowers the environmental impact by approximately 70% in terms of emissions.

Infrastructure

• Salamanca FPU Location: The FPU will be located on KC block 689, at a water depth of approximately 6,400 feet (1,950.72 meters).
• Pipeline Tie-back: The production from the Salamanca FPU will be tied back to the KC Connector (KCC) pipeline, which is part of the Discovery system. This system includes the Larose gas processing plant and Paradis fractionation plant, among other infrastructure.

Environmental and Economic Impact

• ESG Impact: The project has a significant positive environmental impact due to the reuse of an existing production unit, which reduces emissions by about 70% compared to constructing a new facility. The refurbishment and modifications will be conducted in the United States, utilizing local labor.

Key Metrics

• Capital and Operating Costs: Detailed capital and operating costs are outlined in the Wood Mackenzie report, including capital costs from 2022 to post-2030 and operating costs from 2025 to 2034.
• Cash Flow: The project's financial projections include cash flow analysis, both undiscounted and discounted at 10% from January 1, 2025.

Additional Information

• Geological Formation: The oil is found in the Lower Tertiary formation, where LLOG has significant experience from past drilling and development in the Gulf of Mexico.
• Regulatory Approvals: All necessary regulatory approvals have been received to proceed with the development.