Posted on 09/23/2013 7:58:17 PM PDT by ckilmer
Drilling beyond the Eagle Ford Shale
Southwest Research Institute is running training field trips where geologists from oil and gas companies look at places where the Eagle Ford is exposed at the surface. This photo shows a road cut exposure along U.S. Highway 90 west of Del Rio, where the formation is known as the Boquillas. The contrast of colors in the rock is a result of variable weathering patterns.(Southwest Research Institute)
The Eagle Ford Shale is more than just the Eagle Ford.
Operators in South Texas are drilling into other rock formations, taking horizontal turns — and in some cases getting big results.
While the Eagle Ford appears to be the mother lode — the largest and most prolific South Texas formation — several other rock layers sitting above or below it also are producing oil or gas.
Jeff Seiler, managing director of the banking firm Scotia Waterous, has tracked Texas drilling permits and found hundreds of cases of companies targeting other South Texas formations, especially the Olmos Sandstone, Austin Chalk, Buda Limestone, Edwards Limestone and Pearsall Shale, which companies are using to bolster the value of their Eagle Ford acreage.
“We know these are coming on,” Seiler said last week at Hart Energy’s DUG Eagle Ford conference. “We’ve already seen development plans put together and built into valuations for transactions that are on the Street.”
DUG Conference: Eagle Ford oil expected to surpass 1 million barrels per day next year
There have been 292 permits in the Olmos Sandstone, 177 in the Austin Chalk, 60 in the Pearsall Shale, 28 in the Buda Limestone and 24 in the Edwards Limestone.
It’s a small slice of the thousands of wells targeting the Eagle Ford, a 50-mile-wide swath of shale that in Texas runs from the Mexican border to East Texas.
But Lance Robertson, vice president of Eagle Ford operations for Marathon Oil Corp., said the company has started considering other formations in its acreage.
“Over the early part of this year, the middle of this year, we’ve transitioned from being just Eagle Ford focused to looking at other horizons including Austin Chalk and Pearsall, Buda and Wilcox (Formation). And while we’re uncertain of the scale of value of those today, we recognize they’re filled with hydrocarbon and are going to be a value enhancer to our Eagle Ford position. We’re going to go prosecute those.”
Some of the company’s Austin Chalk wells — drilled directly above the Eagle Ford where the two formations meet — have come in producing 1,000 barrels of oil per day, Robertson said.
Seiler said that Texas American Resources is bringing on wells in excess of 500 barrels of oil per day in the Austin Chalk.
And in the Buda Limestone, Beeville-based Dan A. Hughes Co. is bringing on wells in excess of 1,000 barrels of oil equivalent per day, he said.
“We think these wells are below $4 million in cost,” Seiler said.
Big payoff: Marathon Oil pumping 80,000 Eagle Ford barrels per day
The Olmos Sandstone has been a longtime target for drillers, but Sieler said it’s being rediscovered through horizontal wells and hydraulic fracturing, the process of pumping high volumes of water, sand and chemicals at high pressure to crack open dense rock. Among the companies finding success in the Olmos is Houston-based Swift Energy in McMullen County.
Seiler said the Pearsall also has had encouraging results and “is a very thick section” that’s hydrocarbon rich. And he said the Edwards is on the radar screen, but has not had as much activity. “We’re not sure what to make of it, how much running room it has,” he said.
The Eagle Ford generally produces more oil on its northern arc, more natural gas to the south and natural gas liquids in the middle. Similarly, these other formations in some areas might produce dry gas, but in another area might provide a bonanza of profitable crude oil or natural gas liquids.
Allen Gilmer, chairman and CEO of the research firm DrillingInfo, said it’s not just other rock formations — drillers also are starting to differentiate between the upper and lower parts of the Eagle Ford, targeting different zones within the shale.
“That whole trend is going to be multiple rocks producing and each of them having very different criteria as to how to optimally produce them,” Gilmer said.
Of the non-Eagle Ford formations, Gilmer said the Buda in particular is starting to produce strong results. He said there have been two or three “spectacular” wells in the northern Gonzales County area where the Eagle Ford isn’t considered viable for oil production. “Some of those look like they’re going to be right in the sweet spot of the Buda.”
Pearsall Shale: Excitement grows for another South Texas shale
Tony Sanchez, CEO of Houston-based Sanchez Energy Corp., said the company recently drilled an Austin Chalk well in Frio County at a cost of $2 million.
“That one was principally drilled to hold a lease,” Sanchez said. “To be totally honest we’ve been totally focused on the Eagle Ford. At this point, I think we’ve got our hands full with it. We think that the chalk is prospective certainly, but it requires work to develop the prospect. But we know that every Eagle Ford well we drill goes through the chalk, and we’ll log it and tie it into our databases.”
The company also has looked at the Buda and Pearsall, and said most of its acreage has Pearsall potential. “We just haven’t seen good well results yet that justify the cost,” Sanchez said.
Ultimately, Sanchez and many other companies will remain focused on the Eagle Ford, where they’re getting more profit for their dollars spent. Next year, Sanchez Energy plans to spend $660 million drilling wells in the Eagle Ford.
“If we could double it, we’d still drill that much more Eagle Ford,” Sanchez said.
I hate to sound cliche, but - Drill baby drill!
Bump.
“..I hate to sound cliche, but - Drill baby drill!...”
Oh, we are big time. The more wells, the more expansion of treating facilities and the infrastructure to support it all. I only need another year of work in this formation and I can retire...maybe...
There is not reason that horiontal fracking could not be used on the Lower Wilcox in some areas. I have seen some zones that were several 100 feet thick of pay.
The Lower Wilcox has always been a tight formation and been a prime candidate for acid fracking in the past to give up it’s black gold.
The Lower Wilcox has always been a tight formation and been a prime candidate for acid fracking in the past to give up it’s black gold.
..........
Judging by the article the Wilcox is one of many formations in the area above and below the Eagle Ford formation. Makes sense that the drillers would go for the smaller formations from pads they’ve already set up so even though the a payout may be smaller the start up costs are less.
But there are so many formations mentioned in the article that you have to wonder if all the estimates of commercially available oil are way out of joint.
Well, I imagine that with oil prices hovering around $100@barrel — darn near every drop of oil in south texas is commercially extractable. 100@barrel oil won’t last forever however. so drillers have got to get their costs down asap.
I only need another year of work in this formation and I can retire...maybe...
.......
dang that’s tall talk. what do you do?
Eagle Ford been veddy, veddy good to Texas ;) I know we are so thankful for this activity right now, especially during the 0 economy.
We have one well on our property in the lower that has 300’ of pay in it. Never saw that much before and would almost call it a crossing strata and may well be.
Would have been a perfect candidate for horiontal but they completed it vertical and moved over and drilled another vertical one....ahhhhhhhhh.
I’m a self-employed consultant. Right now, I’m the acting senior construction manager for one of the larger oil & gas players down here in south Texas. I’ve been down here since August 2010. Financially, I could actually bail out right now, but I’m in a key position and enjoy what I do. Besides that, it’s so politically incorrect and it pees odongo off, so I like it even more. Anything I can do to deprive his arab friends from selling a gallon of oil to America is a high priority with me.
sounds like fun.
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