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Parker Conrad

The lower tertiary is an informal designation for a layer of the earth's crust deposited during the Paleogene period, between 65 and 23 million years ago.

In the oil exploration industry, the Lower Tertiary is usually shorthand for deepwater drilling in the Gulf of Mexico that reaches down to the "lower tertiary" region of the earth's crust, much deeper than traditional offshore drilling, which reaches only to younger (and closer to the surface) miocene period rocks. While onshore drilling often reaches down to the lower tertiary, it was only in 2006 that companies were able to drill down to this level offshore. Production from this region isn't expected to come online until 2010.

Companies have drilled several test wells down to the lower tertiary in the gulf of Mexico, such as Cascade, St. Malo, Jack, and Kaskida, but none are operational yet.

Companies with operations in the lower tertiary include:

• ChevronTexaco (CVX) has the largest exposure to the lower tertiary of any company, and owns 50% of the Jack 2 rig - a test well that set over half a dozen world records for equipment pressure, depth, and duration.^[1]
• Devon Energy (DVN) has the second largest exposure to the lower tertiary, and owns 25% of Jack 2.^[2]

Other notable players include:

• Norway's STATOIL ASA (STO), which owns 25% of the Jack 2 rig.^[3]
• BP (BP), which owns a majority of the Kashida rig.
• Anadarko Petroleum (APC), which has a 25% stake in the Kashida rig.