Fri Jul 11th, 2014
The Southern Ute Drum
Members of the Growth Fund’s Red Willow LLC and Southern Ute Indian Tribal Councilmembers attended the christening of the semi-submersible floating production system, Delta House, Wednesday, July 9.
The Tribe became involved as a partner in the project early on in 2004 when it began funding the exploration of wells.
“We funded 45 percent of the exploration for the wells.” Bob Zahradnik, growth fund operating director said. “Red Willow was one of the founding partners that helped get it all started, we are part of the partnership that found the wells.”
Financially, the Delta House investment is expected to be a big gain for the Tribe.
According to Zahradnik for fiscal year 2016 – the first full year of production – Delta House is forecasted to contribute 42 percent of Red Willow’s total earnings before interest, tax, depreciation and amortization (EBITDA) and 34 percent of the Growth Fund’s total EBITDA.
The 296-foot structure will be installed in the Mississippi Canyon of the North-central Gulf of Mexico as soon as the end of July, Zahradnik said.
“With good weather it will be out there by the end of July, but they need about 10 days of good weather to install it,” he said.
If the weather doesn’t look promising Delta House will be held back and towed out after hurricane season.
There are a total of five wells drilled to date with plans of about 15 wells being drilled.
The Delta House FPS will not drill the wells, as a separate offshore drilling rig will do the drilling. The FPS’ job is to receive the raw production from the wells, and separate the crude oil and natural gas that will flow into the export lines.
Once installed, Delta House will have 80,000 barrels of oil flowing thorough it per day, with a peak of 100,000 barrels, Zahradnik said.
First production from Delta House is forecasted for April 2015.
“If we get [Delta House] out there by the end of July that’ll be sooner,” Zahradnik said.