Repsol's Supercomputer Strikes Black Gold

In late 2008, I highlighted Repsol YPF's (NYSE:REP) plan to number-crunch its way to paydirt in the oil patch. Using a supercomputer and reverse-time migration imaging technology, the Spanish oil major thought it could improve its chances of hitting offshore oil and gas targets.

Repsol thought right. The company has nailed a series of big-time deposits.

To touch on just a few highlights, there was the Guara well in Brazil, drilled with BG and operator Petrobras (NYSE:PBR). Repsol's 25% stake in Guara could add 500 million barrels of oil to the company's reserves. The trio made a more recent find in the same deepwater block.

With Eni (NYSE:E), the company made the largest natural gas discovery in Venezuela's history, weighing in at the equivalent of more than 1 billion barrels of oil. In that case, the companies didn't even have to step out into the deepwater, drilling the discovery well with an Ensco (NYSE:ESV) jackup! Alongside partners Anadarko Petroleum (NYSE:APC), Woodside Petroleum, and Tullow Oil, Repsol made the first-ever discovery of hydrocarbons in offshore Sierra Leone.

Today we learn that Repsol has made two more oil finds, this time with partners BHP Billiton (NYSE:BHP) and Hess (NYSE:HES) in the deepwater Gulf of Mexico. One discovery was a new section in an existing well, which added 497 feet of net oil pay. That's a huge oil column, and interestingly enough, Repsol found it by testing shallower sections, rather than drilling deeper. The other discovery was a new well in another part of the same development area.

I don't know that Repsol's supercomputing project, dubbed Kaleidoscope, necessarily had a hand in all of these discoveries, but the company has quickly asserted itself as a force to be reckoned with in offshore exploration. I would expect more good things from it going forward.