This past year has seen significant advances in exploration and development. In 2006, twelve new deepwater discoveries were announced by industry as a result of ambitious exploration programs. These discoveries are estimated to add approximately 1.3 billion barrels of oil equivalent (BOE) to the GOM reserves base. Some of these discoveries were located in the new Lower Tertiary trend, where large oil and gas volumes have been encountered, but have only been lightly tested. The first sustained well test in the trend, the Jack 2 well, occurred last year and its results are being carefully analyzed. Data from this test were highly publicized and are very encouraging; however, many questions remain to be answered before it is determined whether the hydrocarbon resources throughout the trend will be economically recoverable.