For those who are not as familiar with the Granite Wash, I’ll start of with a quick explanation. Without getting too technical, the Granite Wash refers to a sequence of distinct layers, each with a unique production profile. There is huge variability of the production stream from these various layers. The Granite Wash is very popular right now because operators have discovered layers within the wash that produce high amounts of liquids and respond well to horizontal drilling (as well as vertical).
I want to post an entry illiustrating this. First, here is a graphic of the rock column I found on a google search. It is from www.seismicspecialists.com. It clearly shows the order in which the layers are deposited. The Atoka is mostly dry and is situated between the wet Des Moines and Morrow.
With that in mind, here is a section of Beckham County, Oklahoma that SM Energy has been active in. The Wester well is producing from the Atoka and is pretty much dry with a peak of 6 bbls/D (not including NGLs if they are present). The offset McEntire is from the Des Moines formation and is very wet with a peak monthly liquids rate of 310 bbls/D.
I think this is a great illustration of how operators are experimenting with the different zones under their acreage. Companies like Forest Oil have said that the previously thought-to-be dry Atoka is producing liquids on the Texas side in nice quanitites.
The Granite Wash is one of those unconventional plays with so much heterogeneity and variability that it is impossible to make a call right now on which acreage is high grade vs low grade, and difficult to predict who has a core position until production is released. The potential for stacked pay is great, and long-term the Granite Wash will be profitable in quite a few pricing environments.
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