[one_half_last]Every once in a great while I have the luxury of scanning activity across the U.S. to find permitting or development I find interesting.
Below is a map of the 32,705 permits filed in the lower 48 in the last 12 months. The permits in green caught my attention.
NEVADA
I’ve always had a lot of respect for the explorers that somehow found a way to work through the complicated geology of the Basin and Range and discover oil in Nevada’s desolate Railroad Valley in 1954 from fractured welded tuffs at Eagle Springs field.
In 1976, Trap Spring was discovered and from fractured volcanic rocks. In 1983, Grant Canyon was discovered in Railroad Valley and produced from porous dolomite at rates around 6,000 barrels of oil per day.
Grant Canyon Oil & Gas LLC has taken a permit for an 11,500-foot well about four miles NNW of Blackburn field.
The eight producers at Blackburn Field have produced about 2.5 million BO, 2.5 BCF, and about 34 MMBW from depths of around 6,500 feet, so the added mile of permitted drilling true vertical depth (TVD) is thought provoking—to say the least.
Grant Canyon Oil & Gas LLC states in the permit that the well is being considered for unconventional well stimulation. But since the Nevada permit form does not indicate that the well will be deviated or horizontal, I wonder whether it’s a penetration and fracture stimulation of the underlying chainman high total organic carbon (TOC) source rock, or a lateral that will be landed in known Nevada reservoir.
NEW MEXICO
Gouger Oil Co. has filed a permit for a 7,800-foot vertical well in the very lightly drilled, non-productive Quay County, New Mexico. The well is a wildcat that aims to test the Granite Wash, which is pretty breathtaking, since the closest decent Granite Wash production in Oldham County, Texas—interestingly at around 6,500 feet—is nearly 65 miles ENE.
TEXAS
This is the most puzzling permit I found.
Maverick Energy filed a permit on Oct. 21 to drill vertically to 8,500 feet. The location of the well in Hudspeth County is 36 miles ENE of El Paso and nearly 70 miles west of the western edge of the Delaware Basin. And it’s in an area 10 miles west of the underwhelming production established by Trail Mountain Inc.
Why here? If they make a well, it would be one of the most interesting stories of the year.
VIRGINIA
A large number of CBM (coalbed methane) wells have been permitted by EnerVest (87) and CNX (99) in Buchanan and Dickenson counties in Virginia.
Median gas well cumulative production to date in the area for EnerVest (230,000 MCF) and CNX (315,000 MCF) indicates their CBM permitting program should bring in added, long-lived reserves.
Below is a map of CNX’s permitting (yellow diamonds) in Buchanan County and adjacent production.
Offset wells typically have the type of production behavior seen in the chart below.
It’s clear there’s virtually no dry hole risk, and with the expectedly shallow drilling depths, margins should be high.
Both CNX and EnerVest look comfortable in developing these reserves even with natural gas pricing at current levels.
NEW YORK
Since New York currently bans hydraulic fracturing, the state’s interesting permits will be for vertical wells. What interested me about the wells in southwestern New York was not so much the isolated and wildcat nature of them—as you can see, they’re very much within known play areas—but the economics of drilling them.
These wells in Cattaraugus County, New York, by Stateside Energy Group are permitted to a total depth (TD) of around 1,500–1,700 feet. They are surrounded by wells that have made meager production but look as if they might be on trend with slightly better producers.
Even with shallow total depths of around 1,500–1,700 feet, the drilling and completion costs should be, at a minimum, about $50,000. With offsetting Bradford wells making less than 100 barrels per well, it’s difficult to see any economic merit to this drilling program. It would make sense if the wells are being drilled to HBP the acreage for later development—maybe to twin Oriskany gas production found to the northwest?
It’s always enlightening to see how others are thinking outside the box.
Have a favorite wildcat or a unique play history you want to share?
Please contact me at mark.nibbelink@enverus.com.
