Texas oil company hits pay dirt in gulf HOUSTON, July 17 (UPI) -- A Texas energy explorer said further tests were needed but expressed optimism about the preliminary results from an exploration well in the Gulf of Mexico. Helix Energy Solutions Group announced it encountered more than 70 feet of net oil pay in its Danny II exploration well about 145 miles south of Galveston, Texas. The company said additional testing was needed to determine the composition of the fluids from the well. It would provide updates as results emerge. The well was drilled to around 14,750 feet in water depths of around 2,800 feet. Helix said production at Danny II should start during the fourth quarter of 2012. The U.S. Energy Department's Energy Information Administration, in its monthly short-term energy outlook, noted domestic crude oil production increased 3.7 percent last year to 5.7 million barrels per day. Offshore production in the Gulf of Mexico holds steady more than two years after the Deepwater Horizon tragedy.