Houston (Platts)--5May2008

At the end of 2007, the Gulf of Mexico deepwater had 130 producing
projects, double the amount five years ago, US Minerals Management Service
Director Randall Luthi said Monday.

During a press briefing at the Offshore Technology Conference, Luthi said
that 72% of the USG's oil production came from wells drilled in 1,000 feet of
water or greater, while 54% of all Gulf leases last year were located in water
depths greater than 1,000 feet. MMS, the US' offshore oversight agency,
defines deepwater as 1,000 feet of water or greater.

"It's clear that deepwater advancement is occurring in all areas --
leasing, drilling and production," Luthi said in unveiling a report,
"Deepwater Gulf of Mexico 2008: America's Offshore Energy Future."

Total production in the US Gulf averaged 1.3 million b/d of oil and 7.7
Bcf/d of natural gas last year; this compares to 1.29 million b/d and 7.98
Bcf/d in 2006.

At the two 2007 lease sales in the Central and Western Gulf last year,
nearly 70% of the tracts that received bids were located in waters 1,312 feet
deep or greater, Luthi noted.

Last year's leasing trends that favored deepwater continued this year
with the Central Sale and Eastern Gulf sales in March, where nearly 70% of the
total tracts receiving bids were in greater than 1,300 feet of water, MMS Gulf
Regional Director Lars Herbst said at the press conference.

Last year, 94 exploration wells and 48 development wells were spudded,
with 24 of them located in depths greater than 7,500 feet, a record for those
water depths, Herbst said. The 94 exploration wells accounted for 66% of
wells of the total 142 wells drilled in 2007.

Meanwhile, the 48 development wells last year represented a 41% increase
over the number of wells in 2006.

The 142 wells drilled in 2007 was up 6% from the 134 drilled in 2006 and
up 18% from the 120% in 2005, the MMS report said.

--Starr Spencer, starr_spencer@platts.com