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This Month in Unconventionals – November 2012


It’s time to recap the biggest takeaways from American unconventionals that took place throughout the month of November. You might think with the end of the year approaching, companies would put it in cruise control and coast through the New Year. But, true to form, several of the biggest players forged full-steam ahead snatching up crucial acreage and bringing on several significant wells.

Therefore, let’s get right into and see what happened This Month in Unconventionals.

  1. Cline Shale: The Cline Shale oil play is roughly 9,250 feet below the surface along the eastern flank of the Midland Basin and is shaping up to become a key component for US Energy Independence. Devon recently reported an impressive test well that showed the formation contains 3.6 million barrels of recoverable oil per square mile. The 9,800 square mile area of the Cline indicates the play contains over 30 billion barrels of recoverable oil. This dwarfs the Bakken and Eagle Ford, which contain an estimated 4.3 billion barrels and 7 to 10 billion barrels of total recoverable reserves, respectively. Laredo Petroleum is leading the drilling charge with 33 gross horizontal wells. The company also snatched up 142,000 net acres in the area. Apache Corporation plans to drill 6 wells, but holds more acreage than any other company with 520,000 net acres. Devon is holding its own with 389,000 net aces, while Exco, Firewheel Energy, Callon Petroleum, Chesapeake and Range Resources are all staking out positions in the play. 2013 looks to be a very exciting year for the Cline Shale. Click here to read the full story.
  2. Granite Wash: The Granite Wash resides in the Texas Panhandle and Western Oklahoma. Operators have been drilling the formation in various capacities as far back as 1964. But, while it’s not a new play, Q3 of 2012 saw some interesting developments from top players in the area. Chesapeake currently holds 190,000 net acres in the Granite Wash. The company brought a smattering of strong wells in Q3, most notably the Davis 65 21H, which achieved a peak rate of approximately 3,765 boe per day. Apache is running 23 rigs in the region. Despite low NGL prices, the Granite Wash continues to be the focus of their drilling program, as it remains economic to develop. Linn Energy, conversely, has stated they are shifting their drilling program away from the Granite Wash to focus on the liquids-rich Hogshooter formation. The company has successfully drilled 12 Hogshooter wells year-to-date, which have produced a cumulative total of around 700,000 Bbls of oil. With such varying approaches to the region, it will be interesting to see how Q4 activity shakes out and continues into 2013. Click here to read the full article.

  3. Niobrara PRB: Since the Niobrara serves as a hydrocarbon source rock and contains reservoir rocks, it is a self-contained petroleum system. In the Powder River Basin (PRB) of Wyoming, the Niobrara thickness ranges from 50 feet in the eastern side of the basin to a maximum of 600 feet along the western flank. The basin average is around 400 feet thick. Niobrara depth is between 6,000 to 10,000 feet, TOC in the range of 1-8% and porosity is 8-10%. When analyzing the region, it appears major faulting trends only follow the outline of the PRB. While, generally speaking, fracture density has a direct relationship to reservoir permeability, there appears to be no correlation between sweet spots and lineament zones in the PRB. Instead, the data shows, with the exception of the basin’s edges, Niobrara production rates in the PRB are not dependent on faults and fractures. Click here to read the full article.
  4. Bakken: The Bakken is the most prolific tight oil field in the US. There is no small number of operators looking to dominate the play, but they are all going to have to work overtime to overtake Continental Resource’s position. The company was already was already the largest leaseholder in the Bakken before purchasing an additional 120,000 net acres, bringing their total holdings to approximately 1.1 million net acres. Net acres isn’t their only strong suite, either. According to a recent investor presentation, the company contributes to roughly 10% of the rigs, 10% of leased acreage and 13% of total production out of the Bakken. Continental currently has 19 operated rigs, down from 26 in the first half of this year. Target EURs are about 603 Mboe for a 10,000 foot lateral and 30 frac stages. Single well completed well costs average roughly $9.2 million and $8.5 million for ECO-pad wells. With numbers like these, it is no wonder they are also leading Daily Liquid Production, as well. Click here to read the full article.
  5. Marble Falls: The Barnett Shale, the grandfather of all shale plays, might be entering its twilight. However, the Marble Falls formation, lying above the Barnett, may be the hot new play pumping life back into the Fort Worth Basin (FWB). It has great potential to be a prolific tight oil horizontally fractured play. The rock has poor primary porosity and according to Jim Henry, a consulting geologist in the area, the true Marble Falls of the FWB is an impure calcareous rock that contains a large amount of silica in the form of sponge spicules, quartz sand, and shale. Various sources describe the Marble Falls as having multiple facies of spiculitic siltstones and black fissile claystones within the formation. It will be interesting to see if this conventional reservoir will take off and create the same kind of stir seen up in the Mississippi Lime. Click here to read the full article.

That brings us to the close of yet another edition of This Month in Unconventionals. We hope you’re getting value from this series, and encourage you to share these posts with your colleagues in the industry. The more knowledge we hold in common, the faster we can develop our domestic resources, and the closer we all come to Energy Independence!

Now it’s your turn. What was the most interesting development you saw in unconventionals in the month of November? Leave a comment below.

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