Unocal discovers oil

Unocal discovers oil

SUGAR LAND, United States (Reuter): Unocal Corp said Monday it
drilled seven successful oil and gas exploration wells in the
Mahakam Delta area offshore East Kalimantan in Indonesia.

"Based on the drilling to date, we currently estimate that
these discoveries contain more than 40 million barrels of oil
equivalent of recoverable oil and gas with a finding cost of
about 50 cents per barrel," Unocal said.

Four of the wells came in the first phase of Unocal's
Saturation-Exploration (S-X) program, which the company called "a
revolutionary way of doing business in Indonesia.

"It maximizes the drilling dollars and reduces up-front costs
by using a keep it simple,' optimized risk approach," it said.

The S-X program employs slim-hole wellbores and a specially
modified rig to drill the wells. The company uses wireline
formation testing to obtain necessary reservoir information, thus
avoiding the traditional, high-cost test methods.

"A typical S-X well costs about US$1 million and takes under
10 days to complete," Unocal said. "This compares with $4.3
million and more than 50 days for a conventional exploration
well."

The company expects to drill 20 S-X wells this year, the first
phase of a three-year, 60-well program. So far, Unocal has
completed 12 wells in the S-X program, yielding four discoveries.