Texas Drilling Observer |
Commodities (as of 8-28-2008) |
| Light Crude (NYM): $115.59 per Bbl |
| Natural Gas (NYM): $8.05 per mmbtu |
| Texas Rotary Rig Count (as of 8-22-2008): 931 Rigs |
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one of the world's greatest inventions- the rotary table *- Petro-Hunt Presents Case for New Field and 1,280 Acre Well Density for Delaware Basin ShalesThe Texas Railroad Commission held a hearing on Wednesday, August 23rd, to consider the uncontested application of Petro-Hunt LLC to establish a new field to be known as the Toyah, NW (Shale) Field for the Woodford and Barnett Shale Formations in Reeves County Texas. At the hearing Petro-Hunt also sought density rules allowing vertical wells to hold 1,280 acres and horizontal wells to hold acreage amounts that would be more than 1,280 acres and be based on the length of the drainholes. The unit size requested by Petro-Hunt is double the size of the largest units (640 acres) that are typically requested in Texas field rule applications and are quadruple the size of the largest allowed acreage unit in the Newark East (Barnett Shale) Field in north Texas (320 acres). There is, however, miles of undeveloped land to be held in the area and, driving the segment of I-10 between Fort Stockton and El Paso you understand why the Wall Street Journal called the potential gas play "The Big Empty". The combined population of Reeves, Pecos and Culberson Counties is 30,124 while the combined area of those counties is 11,213 square miles. At the roughly hour-long hearing Petro-Hunt presented in very general terms the status of the Barnett Shale/Woodford play in west Texas. Petro-Hunt’s witness testified that of the 15 to 20 wells drilled and tested in the area, none have shown commercial levels of gas production. There is one well, the discovery well, in the proposed Toyah, NW (Shale) Field, the Block 59 State 35 #1H (API No. 42-389-32371). The Block 59 State 35 #1H is located in Section 35, Block 59, PSL Survey, Abstract 2670, Reeves County, approximately 9.8 miles northwest of Toyah, Texas. The well was completed on April 29, 2006 with an initial potential of 213 mcf of gas per day. The well has a horizontal lateral of approximately 3,100 feet in length in the Barnett Shale between the depths of 13,146’ to 13,953’ measured depth. Because of difficulties encountered while drilling the well, costs to drill just the vertical section escalated to $15 million. The well was sidetracked multiple times and, due to additional downhole problems, Petro-Hunt could not drill the lateral to its desired length of 4,000 feet. As of mid August the Block 59 State 35 #1H was producing at a flat gas rate of 300 mcf of gas per day with 50 barrels of water per day. Petro-Hunt believes that factors behind its marginal test in the discovery well include: 1) bad frac: Petro-Hunt believes that gas is coming from only the first stage, closest to the heel of the well, of the three stage frac. The frac. was modeled after the fracs being done in the Fort Worth Barnett Shale. (Petro-Hunt believes that a different type of frac. will have to be designed.) 2) insufficient lateral: The lateral in the discovery well was approximately 3,100 feet long. Petro-Hunt believes that future wells will need to be drilled with laterals 4,000 to 5,000 feet long and multiple laterals will have to be drilled. (Opposing and stacked laterals are being contemplated.) 3) the lateral’s orientation was not ideal: Petro-Hunt relied upon 2D seismic data in drilling its lateral. The lateral was drilled in a north-south location. A southwest-northeast trending fault located 2,000’ to the southeast of the well’s surface location has been identified. Mr. Roberts stated that the results from the well might have been different had the lateral been drilled perpendicular to the maximum stress direction, parallel to the fault. (This newsbit is an excerpt from an article appearing in Volume 8, Issue 33 of the Texas Drilling Observer Newsletter) *- Pioneer Expects Successful
Extension of Edwards Trend in Live Oak County On Tuesday, August 12th, the Texas Railroad Commission approved an order requiring Madisonville Gas Processing to ratably take gas from Crimson Energy’s proposed wells in the Madisonville (Rodessa) Field in Madison County (Docket 03-0245765). The order grants Crimson’s wells access to the MGP gas sweetening plant. Crimson has estimated that its first two wells in the field will have the capability to flow a combined 40 million cubic feet of gas per day, although production will be restricted by the processing capacity of the MGP plant. The two wells currently producing in the field, operated by Redwood Energy, are restricted to a combined rate of 16 mmcf/day. According to Crimson, a rig contract has already been signed for the first two wells with an option to drill a third and the gas processing contract has already been negotiated with the processing plant. A ratable take order was sought from the Commission because an existing agreement between the plant and Redwood Energy gave priority to gas produced by Redwood’s wells over any other well in the system. The Rodessa is a sour gas reservoir that has been on production since 2003. The structure was initially passed over because the gas contained a very high percentage of H2S and CO2. Before gas could be produced from the Madisonville (Rodessa) Field a $15 million gas plant had to be constructed to ‘sweeten’ the gas, which contains 8 percent hydrogen sulfide, 15 percent nitrogen and 8 percent carbon dioxide. A $25 million expansion of the MGP plant is planned to handle gas from an additional three wells Redwood plans to drill. (This newsbit is an excerpt from an article appearing in Volume 8, Issue 31 of the Texas Drilling Observer Newsletter) *- The Exploration Company has Approval for Cyclic Steam Project On February 23rd The Exploration Company out of San Antonio received permits from the Railroad Commission to inject steam into the Upper Cretaceous San Miguel Formation through two wells on its 158,270 acre Chittim ‘B’ Lease in Maverick County. The steam injection will aid in unlocking "one of the most dense, viscous, and sulphur-laden hydrocarbon deposits in the world", according to an article in the December 19, 2005 issue of the Oil & Gas Journal. According to Calgary based Newmex Minerals, which is also involved in the project with The Exploration Company, the tar saturations range from 20 percent to 60 percent. The San Miguel is a sandstone formation with an average pay thickness of 40 feet. Filings with the Railroad Commission show that The Exploration Company plans to inject an average of 1,350 barrels of fresh water steam per day through each well, the Chittim "B" #2374 and Chittim "B" # 1374, in ten day increments, and expects to recover 1 barrel of oil from the formation for every 10 barrels of fresh water steam injected. The limited project area at this point is 640 acres of Section 374, C.H. Dillingham Survey (A-92) and 640 acres of Section 373, G.W. Bowman Survey (A-42) for a total number of 1280 acres. The Exploration Company will extract fresh water from the Carrizo Formation, which is found at a depth of 150 feet. The volume of recoverable fresh water that The Exploration Co. has rights to under the pilot area is 83,414,000 barrels. (This newsbit is an excerpt from an article appearing in Volume 8, Issue 9 of the Texas Drilling Observer Newsletter) *- Commissioners Jones and Carrillo not Sold on Proposal to Eliminate Testing Regulations A proposal from Railroad Commissioner Michael Williams to eliminate G-10 and W-10 testing requirements for many oil and gas wells in the state failed to muster support from either Commissioner Victor Carrillo or Elizabeth Jones Wednesday, July 19th, and instead was left pending to allow Commissioners Jones and Carrillo the opportunity to study further the proposal and gauge the opinion of industry on testing requirements. Commissioner Carrillo expressed concern that stripping annual and semiannual testing requirements for oil and gas wells would deprive many exploration companies valuable data used in evaluating E&P projects. Williams, however, believed that since the Commission does not rely on most tests filed by operators for any use other than data acquisition, they serve no regulatory purpose. "We are causing people to spend money to acquire data to do a test that provides information that we the government do nothing with," Williams said. Under current RRC rules, 43 percent of natural gas wells are exempt from filing a G-10 test after initial completion and 47% of oil wells are exempt from W-10 testing after completion. Williams’ proposal would exempt another 31% of natural gas wells and 29% of oil wells. Commissioner Carrillo also voiced concern that in the past suggestions made to the Commission to eliminate testing requirements were made from only a few individuals and expressed a desire to see more industry support for such a reform before backing the proposal. (This newsbit is an excerpt from an article appearing in Volume 8, Issue 28 of the Texas Drilling Observer Newsletter) *- Expect Typical Agenda from TLMA, Executive Director Says Calling the Texas Land & Mineral Owners Association a "mature organization" whose goals are pretty well known, Executive Director Dr. Kitty Sue Quinn told the Observer that the Association will discuss surface use issues, inactive wells and the TransTexas Corridor it terms of Legislative goals when TLMA holds its annual meeting in Round Rock, Texas on October 5th. Quinn said that on the issue of inactive wells this session TLMA has the luxury of working with an oil and gas industry that is being proactive and has already been working on their own proposals to require operators to put more money aside to make sure inactive wells are plugged. The Texas Oil & Gas Association has been favoring a proposal that would require operators to establish escrow accounts to cover the future plugging costs of their inactive wells. TLMA has discussed the idea of a $400 fee on each inactive well. Quinn also said that the Association will discuss bringing another surface use notice requirement to Legislators. In the ‘05 session TLMA failed to get its legislation passed that would have required operators to provide notice to the surface owner prior to drilling, reentering or recompleting a well. One of TLMA’s major concerns in the ‘07 session will be the TransTexas Corridor, a major $7.2 billion statewide transportation infrastructure proposal by Governor Rick Perry which would require the state to purchase large amounts of land from private land owners under eminent domain laws. TLMA has built up a membership of approximately 1,200 land and royalty owners since its creation in 1999. According to TLMA’s website the Association’s goal is to "maintain and strengthen property rights for all Texas and royalty owners while working to protect our land and water resources from the poorly regulated oil exploration industry." (This newsbit is an excerpt from an article appearing in Volume 8, Issue 38 of the Texas Drilling Observer Newsletter) *- Expanded Tight Gas Area Approved for Barnett Shale A June 6th order approved by the Railroad Commission has added all of Erath County to the ten county region previously designated as a tight gas area for the Barnett Shale. The application (Oil & Gas Docket 09-0247286) was brought to the Commission by Infinity Oil Gas of Texas. This new tight gas area for the Barnett Shale allows current and future gas wells in Erath County producing from the Barnett to qualify for high cost gas certifications. At the time the application was prepared, eight wells in Erath County were completed in the Barnett Shale Formation. Railroad Commission records show that 139 drilling permits for completion in the Barnett Shale have been filed as of Friday, almost all of them since 2005. Johnston & Cloud, an Austin based regulatory consulting and engineering firm that prepared the study and application on behalf of Infinity, provided in-situ permeability and pre-stimulation stabilized AOF calculations for only one data point well. The calculations from the data point well met the specifications for the formation to be classified as a tight gas formation - that in-situ permeability could not exceed 0.1 millidarcies, that the pre-stimulation AOF could not exceed 122 mscf/day, and that the pre-stimulation rate of any oil production was not greater than 5 barrels per day. (This newsbit is an excerpt from an article appearing in Volume 8, Issue 26 of the Texas Drilling Observer Newsletter) Current Statistics... *- August Permits To
Drill *- July Crude Oil Production In August 2007, operators reported 334 oil, 529 gas, 54 injection and three other completions compared to 441 oil, 815 gas, 30 injection and zero other completions during August 2006. Total well completions for 2007 year to date are 9,461 up from 8,768 recorded during the same period in 2006. Operators reported 529 holes plugged and three dry holes in August 2007 compared to 544 holes plugged and 14 dry holes in July 2006. *- July Natural Gas Production Texas oil and gas wells produced 478,578,413 Mcf (thousand cubic feet) of gas based upon preliminary production figures for July 2007, up from the July 2006 preliminary gas production total of 440,099,051 Mcf. Texas production in July 2007 came from 130,291 oil and 76,378 gas wells.
RRC District: (1) SAN ANTONIO AREA RRC District: (2) REFUGIO AREA RRC District: (5) EAST CENTRAL TEXAS RRC District: (6) EAST TEXAS RRC District: (7B) WEST CENTRAL TEXAS RRC District: (7C) SAN ANGELO AREA
RRC District: (8) MIDLAND AREA RRC District: (8A) LUBBOCK AREA RRC District: (9) NORTH TEXAS RRC District: (10) PANHANDLE
"Rotary Table" Photograph compliments of the American Petroleum Institute Texas Drilling Observer
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