Gulf Oil Discovery Lifts Hopes for New Geological Play

A deepwater discovery reported Thursday underscores the growing importance of a geological formation in the U.S. Gulf of Mexico that’s only recently become accessible to crude oil and natural gas producers.

A consortium led by BP PLC (BP) found hydrocarbons at the Kaskida well, right in the middle of the Keathley Canyon offshore area, 250 miles southwest of New Orleans. Other prospects in these kinds of formations – known as the “lower tertiary” – have been found in Walker Ridge and Alaminos Canyon, to the east and the west of Keathley Canyon.

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