Southwestern to probe Smackover Brown Dense lime

Southwestern Energy Co., Houston, said it has accumulated 460,000 net acres prospective for oil in Upper Jurassic Lower Smackover Brown Dense limestone along the Arkansas-Louisiana state line.

The unconventional play is the first the company has revealed publicly of several new ventures it has been pursuing the last 1-2 years and in which it holds a combined 835,000 net acres. The formation’s commerciality is still to be determined, Southwestern said.

Southwestern plans to spud its first horizontal well in the play, in Columbia County, Ark., just southwest of Atlanta and east of Dorcheat-Macedonia oil field, late in the third quarter of 2011. It is to have a 3,500-ft lateral at 8,900 ft true vertical depth.

The company wants to spud a second well later this year in Claiborne Parish, La., that would have a 6,000-ft lateral at 10,700 ft TVD.

The Brown Dense formation is 300-550 ft thick at 8,000-11,000 ft over a large area, said Southwestern, which has invested $150 million in undeveloped acreage. The leases have an average 82% net revenue interest and 4-year average primary lease term with 4-year extensions.

Southwestern said, “We extensively reviewed the Brown Dense across the region and have indications that the right mix of reservoir depth, thickness, porosity, matrix permeability, sealing formations, thermal maturity, and oil characteristics are found in the area of southern Arkansas and northern Louisiana.

“This region of Arkansas and Louisiana has produced oil and gas from the Upper Smackover since the 1920s. The Brown Dense formation is the source rock for these Upper Smackover fields. It has the critical properties necessary to be a successful play and compares favorably to other productive oil plays in the United States. However, it has never been exploited with horizontal drilling technology until now.”

Southwestern aims to drill as many as 10 more wells to test the geological concept in 2012 and if successful could greatly ramp up activity after that.

Southwestern didn’t disclose a map of its lease position, but the Brown Dense play appears to have little or no overlap with the Jurassic Haynesville play now prevalent in North Louisiana and Northeast Texas.

One of the great oil fields in the South and about an hour and a half drive north of me. Decent museum that I’ve been to.

http://www.arkansasstateparks.com/museumofnaturalresources/

In the 1920s, nationwide attention focused on south Arkansas when the Smackover field was ranked first among the nation’s oil fields. For five months in 1925, the 40-square-mile Smackover field was the focal point of one of the wildest mineral booms in North America. Today, south Arkansas’s oil fields produce petroleum throughout a 10-county area.

Columbia and Union counties also stretch over one of the largest brine reserves in the world. Bromine is derived from brine, or saltwater, and local companies play an international role in the commercialization of bromine and its many applications

New Ventures – At June 30, 2011, Southwestern held 2,518,518 net undeveloped acres which were located in New Brunswick, Canada and approximately 835,000 net undeveloped acres in connection with other New Ventures prospects. In New Brunswick, the company is currently in the acquisition phase of approximately 410 miles
of 2-D data and plans to have that finished in September.

The company is also in the second phase of surface geochemical sampling which will provide more information on potential hydrocarbon presence.

Included in the approximately 835,000 net acres are 460,000 net acres where the company will begin testing a new unconventional horizontal oil play. Late in the third quarter, the company plans to spud its first test well targeting the Lower Smackover Brown Dense formation, an unconventional oil reservoir found in southern Arkansas and northern Louisiana. The formation, which ranges in vertical depths from 8,000 to 11,000 feet, appears to be laterally extensive over a large area ranging in thickness from 300 to 550 feet. The company’s investment in undeveloped acreage in the play area to date is approximately $150 million and its leases currently have an 82% average net revenue interest and an average primary lease term of 4 years with 4-year extensions. Below is a map indicating the company’s general area of interest in the play.

“We are very excited to announce our position in the Lower Smackover Brown Dense play which we have been working on for over two years. The formation is an Upper Jurassic age, kerogen-rich carbonate source rock found across the Gulf Coast region of the southern United States from Texas to Florida. We extensively reviewed the Brown Dense across the region and have indications that the right mix of reservoir depth, thickness, porosity, matrix permeability, sealing formations, thermal maturity and oil characteristics are found in the area of Southern Arkansas and Northern Louisiana. This region of Arkansas and Louisiana has produced oil and gas from the Upper Smackover since the 1920s. The Brown Dense formation is the source rock for these Upper Smackover fields. It has the critical properties necessary to be a successful play and compares favorably to other productive oil plays in the United States. However, it has never been exploited with horizontal drilling technology until now,” stated Mueller.

“We hope to receive a permit to drill our first well in Columbia County, Arkansas, in August and will spud later in the third quarter. This well is planned to drill to a vertical depth of approximately 8,900 feet and has a planned horizontal lateral length of 3,500 feet. The well will be extensively logged and a full core will be obtained over the entire Brown Dense interval before the well is completed. Our second well is planned to spud later this year with a total vertical depth of approximately 10,700 feet and a 6,000-foot horizontal lateral in Claiborne Parish, Louisiana. We plan to drill up to 10 additional wells as we continue to test the concept in 2012. If our testing yields positive results, we expect that our activity in the play could increase significantly over the next several years.

“I am very proud of our New Ventures team which has worked on this play for over two years now, analyzing log data on literally thousands of wells across the play area and thousands of miles of 2-D seismic data. While its commerciality is still to be determined, we believe that our position could have a significant positive impact on our company. We are also working on other New Ventures ideas and will provide updates on those in the future. In the meantime, we’re poised to have a very successful year in 2011 and believe that the combination of our Fayetteville, Marcellus and New Venture programs will continue to provide significant value creation for our shareholders.”

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