Koil Energy Solutions Inc. (KLNG)

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ENI moves on with Longhorn subsea project
2008.04.28 - Projects

Eni has started the development of the Longhorn gas field, located in the Gulf of Mexico (blocks MC 502 and 546) approximately 195 kilometres southeast of New Orleans in 730 meters (2,400 feet) of water depth. The Longhorn development is operated by Eni with a 75% working interest, while Nexen Petroleum Offshore U.S.A. Inc. owns 25%.
After the successful completion of the offshore appraisal campaign in October 2007, the Longhorn project has been sanctioned with total investments of $587 million. Initial production is expected to begin in March 2009 with a gross peak production rate of 200 million cubic feet per day (approx. 35,000 barrels of oil equivalent per day). In addition, the appraisal campaign showed interesting upside potential in the field, with the presence of additional hydrocarbon pay whose commerciality is currently being evaluated.

Major contracts for subsea equipment supply have been awarded and manufacturing is underway. Offshore installation contracts are in the process of being awarded. Well completion operations will start in Q3 2008 with the Transocean Amirante rig, currently under a 3 year contract with Eni, which makes the rig available for this activity as well as other Eni operated operations in Gulf of Mexico. The Longhorn development will consist of three subsea wells tied back approximately 32 kilometres to the Crystal platform.

Eni holds additional interests in other leases in the Greater Longhorn Area, which is one of its core areas in the Gulf of Mexico. Additional exploration activity is currently being carried out. The Longhorn development continues to strengthen Eni's operating presence and production in the Gulf of Mexico.

In the US, Eni currently owns lease interests in 408 Gulf of Mexico blocks, 70% of which are in deepwater. Eni is also one of the largest Gulf of Mexico producers with a daily equity production in excess of 110,000 boe, of which 60% is operated. In addition, Eni also owns interests in 158 leases on the North Slope of Alaska.