|
|
Oil and Energy
|
|
||
Cline Shale play part of unconventional Permian gameWolfberry play also affects parts of the South PlainsPosted: February 9, 2013 - 11:19pm | Updated: February 10, 2013 - 1:37am
As the size and scope of Permian Basin shale plays increase exponentially, the vertical Wolfberry and horizontal Wolfcamp shales have re-emerged as some of the hottest unconventional plays around. Texas now produces more oil than the U.S. imports from Saudia Arabia, according to Texas Railroad Commissioner Barry Smitherman. “Within the next 10 or 12 years, the U.S. can completely eliminate the need for foreign oil,” Smitherman said in a recent statement. “And Texas is leading the nation in eliminating that need.” Geological and production expectations for these plays will continue to rise as technology advances.
The Wolfcamp Blanketing the Permian Basin, is the Wolfcamp, source rock for much of the area’s conventional production. Many industry experts agree the Wolfcamp shale could turn into one of the largest oil discoveries in U.S. history. Spanning 30 West Texas counties, the Wolfcamp formation lies 7,200-8,100 feet deep, directly below the Spraberry field. It is thicker than most, ranging from 800-1,200 feet thick, and in some areas up to 2,000 feet thick. The Wolfcamp is likely the thickest of any onshore U.S. oil shale play, with up to 1,000 feet of potential payout across hundreds of thousands of acres, according to Scott Sheffield, chief executive of Pioneer Natural Resources “It will be the biggest, and it is already the thickest,” Sheffield said. “So it’s got the most pay zones of any oil shale play in the U.S. I call it the third or fourth coming of the boom in West Texas.” As a horizontal target located above the Canyon, Strawn and Ellenburger formations, and below the Clearfork, the Wolfcamp has excellent potential for multitarget vertical wells or recompletion opportunities, he said. The Wolfcamp is typically broken up into an upper and lower section. Operators target two intervals in the upper portion, leaving the thick lower Wolfcamp section. Estimated ultimate recovery projections can change dramatically as shale plays develop. The Wolfcamp EUR went from 2 million barrels in 2009 to 37 million barrels in the most recent report. With 900,000 acres under lease, Pioneer has the largest land position in the Wolfcamp. Pioneer’s first Wolfcamp well produced seven times more barrels of oil equivalent than a normal Spraberry vertical well over a similar 90-day period, according to its website. Two completed wells in the Wolfcamp have already exceeded Pioneer’s expectations. Still in early production, each produces 800 to 1,000 barrels of oil a day. Several companies have been aggressively accumulating Wolfcamp acreage over the past few years. Approach Resources, Concho Resources, ConocoPhillips, Devon Energy, El Paso Corp., EOG Resources, Forest Oil, HighMount E&P, and Pioneer Natural Resources are all players. The Wolfberry Below the Sprayberry formation in Texas and New Mexico lies the Wolfcamp shale. The Wolfberry trend identifies the area where the Sprayberry and Wolfcamp zones are comingled. Drilling attempts began on the Wolfcamp in the early 1990s, but because of the low permeability of the area most wells were not economically viable and drilling was abandoned, reports from the Texas Railroad Commission show. Almost a decade later, advances in technology reopened the possiblity of Wolfcamp drilling. By combining production of the Sprayberry and Wolfcamp shales through enhanced, multi-stage fracture stimulation, recovering Wolfcamp deposits became economical. More than 5,800 Wolfberry wells have been completed since the late 1990s, and an additional 3,514 potential drilling locations identified, according to a 2012 Texas Railroad Commission report. Between 7,500 and 10,000 feet deep, the overall Wolfberry interval is about 1,000 feet thick and includes more than 300 productivity cores, according to the Bureau of Economic Geology. Garza, Gaines, Dawson, Borden, Andrews, Martin, Howard, Crane, Ector, Reagan and Glasscock counties made up the origional Wolfberry area. The Wolfberry production area was recently extended to include Terry, Lynn, Hockley and Lubbock counties, and could possibly extend all the way into the northern Texas Panhandle, the latest geology maps on file show. Concho Resources, Pioneer Natural Resources, Oxy USA and ExL Petroleum are just a few of the oil companies actively developing the Wolfberry. Indications from these companies show expectations for the resurrected Wolfberry continue to grow as drilling advances making recovery of Wolfcamp deposits more cost effective. Drilling through the full Wolfcamp section, not the upper Wolfcamp alone, Pioneer increased production 20 percent. Last month, Big Sky Petroleum drilled its first Wolfberry test well on the Midland Basin prospect, a contiguous lease block of 2,300 net operated acres recently aquired by Big Sky, according to its website. The test well will be used to log the entire Wolfberry interval and pull at least 35 sidewall cores for evaluation. Energen plans to spend $240 million in the Wolfberry this year, according to its budget. The Cline shale Roughly 9,250 feet below the surface of the Permian Basin lies the Cline shale. The Cline, sometimes referred to as the Wolfcamp, runs about 140 miles north to south, and is 70 miles wide through portions of Mitchell, Coke, Fisher, Glassock, Howard, Irion, Nolan, Reagan, Scurry and Reagan counties. The oil reservoir is believed to be 200 to 550 feet deep, and contain more than 30 billion barrels of recoverable oil, according to geologic research. In the counties to the east, the Cline shale is picking up. Fisher and Nolan counties have emerged as significant in the play. The southern end of the play has picked up as well, with significant increases in leasing activity in Tom Green and Irion counties. Geologist Gary Dawson who has studied the Cline for years said, “It’s kind of the perfect shale...Right now we’re just barely tapping the potential of the Cline shale.” Some of the key players: ■ Occidental says that its Permian Basin crude production accounts for about 15 percent of all oil produced in the state, Railroad Commission reports show. Those same reports show more than 2,000 drilling locations on nearly 3 million net acres. ■ Apache Corp. will continue 2012 drilling in the Wolfcamp and Cline shales. It estimates that it will drill, in total, 760 wells with an average 32 rigs in the Permian Basin next year, according to its website. ■ Early drilling results from Pioneer’s horizontal Wolfcamp shale “are exceeding expectations,” The company estimates that the southern 200,000 acres of its Spraberry position have more than 4,000 horizontal drilling locations, with a gross resource of more than 2 billion barrels of oil equivalent or BOE. Based on recent success, Pioneer is increasing its net resource potential from 5 billion to 7 billion BOE. Future horizontal wells in the Wolfcamp shale are expected to have longer lateral lengths with significantly higher estimated ultimate recoveries, according to its website. Wolfcamp will continue to be Pioneer’s focus, with about 90 horizontal wells drilled in the play by the end of 2013 to hold expiring acreage. Between 30 and 35 horizontal wells were drilled last year. ■ Concho Resources has purchased Three Rivers Operating Co. for $1 billion in cash. Three Rivers held about 310,000 gross acres in the Permian. In December 2011, Concho bought Petroleum Development Corp.’s remaining Permian Basin assets for about $175 million, giving Concho roughly 10,800 gross acres and adding more than 170 identified Wolfberry drilling locations The company’s $1.5 billion 2012 capital budget includes $1.4 billion for drilling and completion activities. At the end of the first half of 2012, Concho was operating 37 drilling rigs, including seven in New Mexico’s Yeso field, 19 in the Texas Permian Basin, 10 in the Delaware Basin and one in the Lower Abo formation of New Mexico, according to its website. Currently Concho is running 15 horizontal drilling rigs within that 37 operated-rig total, including 10 in the Delaware basin, one in the Texas Permian and four on the New Mexico shelf. Concho identified 5,772 Permian Basin drilling locations, with proved undeveloped reserves attributable to 1,786 of those sites. Of these, 2,064 target the Wolfberry, 2,629 target the Wolfberry play and 927 target the Wolfcamp. The company drilled about 350 Wolfberry play wells in 2012. Devon’s Permian production averaged 58,700 BOE during second-quarter 2012, a 21 percent increase from second-quarter 2011. The company’s Permian oil production grew 24 percent over the same period, with light oil accounting for nearly 60 percent of its total Permian volume. Devon also has been active in the Wolfcamp shale recently, with a couple of successful horizontal wells. Sumitomo Corp. invested $1.4 billion in exchange for 30 percent of Devon’s interest in 650,000 net acres in the Cline shale and Midland-Wolfcamp shale, its website shows. The partnership drilled 40 gross wells in 2012, including 28 in the second half. Devon has two rigs working in each of the Wolfcamp and Cline shales. Lynden Energy increased drilling 2012 plans for its Wolfberry assets, from 31 to 37 gross wells, according to the company. Wolfberry completions, between 7,000 and 10,500 feet, total depth, are anticipated from a 2,500- to 3,000-feet gross interval. Laredo has more than 600 vertical and horizontal wells on its Permian acreage, more than 2,200 feet of whole cores and more than 400 sidewall cores, according to the Railroad Commission. About 80 percent of Laredo’s $700 million 2012 capital budget, about $560 million, was allocated for the vertical Wolfberry play, and the horizontal Wolfcamp and Cline shales, its budget shows. Laredo has been drilling and gathering data in the Cline shale since 2008 and has drilled and completed 26 horizontal wells in the Cline shale. The operator is contracting 16 rigs in the Permian. Linn Energy entered the Permian Basin in 2009 via acquisitions of various properties, according to its website. By the end of 2010, Linn closed on 10 Permian Basin acquisitions totaling about $1.5 billion, resulting in more than 100,000 net acres while operating more than 1,300 producing wells. Production in 2011 increased 135 percent over 2010 production, according to the company. Linn operated six rigs in Wolfberry during 2011, drilling 114 wells. The company identified about 400 future drilling locations. Most of the company’s Wolfberry wells include production from Spraberry, Wolfcamp and Strawn intervals. |
return to message board, top of board |