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E. The Macondo Well

BP acquired Lease OCS‐G 32306 in an MMS Central Gulf of Mexico lease
sale on March 19, 2008. This lease covers 5,760 acres and extends for 10 years,
beginning on June 1, 2008. BP is the designated lease operator and shares
ownership of the lease with Anadarko and MOEX.

The Macondo well is located approximately 48 miles from the nearest
shoreline, 114 miles from the shipping supply point of Port Fourchon, Louisiana,
and 154 miles from the Houma, Louisiana helicopter base. BP began drilling the
Macondo well (referred to as “spudding” the well) on October 7, 2009, using
Transocean’s Marianas rig. After the Marianas sustained damage during
Hurricane Ida in November 2009, BP moved the Deepwater Horizon to the
Macondo well. The Deepwater Horizon crew resumed drilling operations at
Macondo in February 2010.

BP and Transocean experienced several challenges in drilling the
Macondo well. In October 2009, the well experienced a kick during drilling
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operations. The drilling crew experienced another kick on March 8, 2010. As a
result of the March 8 kick, the drill pipe became stuck in the wellbore, and the rig
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crew could not pull the pipe free. The crew, therefore, had to sever the drill
pipe and drill a bypass around the portion of the well with the stuck pipe. The
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well also experienced several “lost return” incidents during drilling, when
drilling mud pumped down the wellbore did not return to the surface as
expected because some volume of the mud flowed into and was lost in the
formation. Lost returns are not uncommon and can occur for a variety of
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reasons, such as a fracture in the formation or drilling in overbalanced
conditions. Because of these and other challenges, on April 20, 2010, the
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Macondo well was about 38 days behind schedule and approximately $58
million over the original budget.
28

23 MC 252 Well Activity Report, 10/25/2009.
24 IADC Reports, 3/8/10 ‐ 3/12/10.
25 A bypass is a secondary wellbore drilled away from the original hole. It is not uncommon for
an operator to drill a bypass while experiencing problems during the drilling of a well.
26 IADC Reports, 3/8/10 ‐ 3/12/10.
27
As discussed throughout the Report, the lost returns at the Macondo well were of note because
of their frequency and because they occurred along with other anomalies.
28 BP‐HZN‐MBI‐00125958; BP‐HZN‐MBI‐0019553; BP‐MB‐HZN‐00192599.

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