2011 Drilling Highlights - Oklahoma Geological Survey - University ...
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THE JOURNAL OF THE OKLAHOMA CITY GEOLOGICAL SOCIETY<br />
VOLUME 62 ~ MARCH | APRIL 2012 ~ NUMBER 5<br />
<strong>Oklahoma</strong> <strong>2011</strong><br />
<strong>Drilling</strong> <strong>Highlights</strong>,<br />
The Geology and Deep<br />
Structure of the <strong>Oklahoma</strong><br />
Ouachita Mountains –<br />
The SOPC 1-22<br />
Weyerhaeuser Well,<br />
And much more.
Volume 62 | Number 5<br />
The Journal of the <strong>Oklahoma</strong> City <strong>Geological</strong> Society<br />
Shale Shaker Staff<br />
EDITOR:<br />
Michael Root, CEO, TerraQuest Corporation<br />
[email protected]; [email protected]<br />
405-359-0773<br />
ASSOCIATE EDITOR:<br />
Neil H. Suneson, <strong>Oklahoma</strong> <strong>Geological</strong> <strong>Survey</strong><br />
[email protected]<br />
GEOLOGISTS WIVES ASSOCIATION:<br />
Stacy J. Harris, Geologist Wives<br />
PRODUCTION & DESIGN:<br />
Theresa Andrews, Art Director,<br />
Visual Concepts & Design, Inc.<br />
[email protected]<br />
405-514-5317<br />
EDITORIAL BOARD:<br />
M. Charles Gilbert, Geologist,<br />
ConocoPhillips School of Geology and Geophysics, OU<br />
[email protected]<br />
Michael W. Smith,<br />
Geologist, Weston Resources, Inc.<br />
[email protected]<br />
Raymond W. Suhm,<br />
Independent Geologist, Consultant<br />
[email protected]<br />
Kris Wells,<br />
Geologist, Mustang Fuel Corporation<br />
[email protected]<br />
OCGS Executive Committee<br />
PRESIDENT:<br />
Greg Flournoy, Schlumberger Oilfield Services<br />
VICE PRESIDENT:<br />
Mark Goss, RKI Exploration & Production<br />
SECRETARY:<br />
Jami Poor, MAP<br />
PAST PRESIDENT:<br />
Suzanne Rogers, Sandstone Energy Acquisitions Corporation,<br />
Chair of Energy Libraries Online<br />
TREASURER:<br />
Hank Trattner, Trattner & Associates<br />
LIBRARY DIRECTOR:<br />
Steve Harris, Okland Oil Company<br />
COUNCILOR:<br />
Jim Franks, Independent Consulting Geologist<br />
WEBMASTER:<br />
John McLeod, Chesapeake Energy Corporation<br />
SHALE SHAKER EDITOR:<br />
Michael Root, CEO, TerraQuest Corporation<br />
SOCIAL CHAIRMAN:<br />
Greg McMahan, SandRidge Energy, Inc.<br />
AAPG MID-CONTINENT REPRESENTATIVE:<br />
H.W. (Dub) Peace<br />
ENERGY LIBRARIES ONLINE CHAIRMAN:<br />
Suzanne Rogers, Sandstone Energy Acquisitions Corporation<br />
OCGS Offices and <strong>Geological</strong> Library:<br />
120 North Robinson, Suite 900 Center,<br />
<strong>Oklahoma</strong> City, OK 73102<br />
Phone: (405) 236-8086 | Fax: (405) 236-8085<br />
Website: www.ocgs.org<br />
Michelle Hone,<br />
Accounting Manager/Administrative Assistant<br />
Email: [email protected]<br />
Pam Yeakley, Library Manager, OCGS<br />
Email: [email protected]<br />
March ~ April 2012 | Page 337
Table of Contents<br />
The Journal of the <strong>Oklahoma</strong> City <strong>Geological</strong> Society<br />
Shale Shaker Features<br />
342 <strong>Oklahoma</strong> Is Set To Lead The Nation; Michael<br />
Root, Editor, CEO, TerraQuest Corporation,<br />
Edmond, OK<br />
360 <strong>Oklahoma</strong> Well Status; Randy Peterson, IHS<br />
395 State of the Industry; Michael Root, Editor, CEO,<br />
TerraQuest Corporation, Edmond, OK<br />
Oil and Gas Exploration<br />
362 The Geology and Deep Structure of the<br />
<strong>Oklahoma</strong> Ouachita Mountains - The SOPC 1-22<br />
Weyerhaeuser Well; Michael D. Allison, North<br />
Texas Sample Log Service; William H. Willis<br />
II, Manager, Southern Minerals, Weyerhaeuser<br />
Company; Dr. Neil Suneson, <strong>Oklahoma</strong><br />
<strong>Geological</strong> <strong>Survey</strong><br />
302 <strong>Oklahoma</strong> <strong>2011</strong> <strong>Drilling</strong> <strong>Highlights</strong>; Dan T. Boyd,<br />
<strong>Oklahoma</strong> <strong>Geological</strong> <strong>Survey</strong><br />
About the Cover<br />
Page 338 | March ~ April 2012<br />
Professional Organizations<br />
344 <strong>Oklahoma</strong> <strong>Geological</strong> Foundation Report; Thomas<br />
C. Cronin, OGF Chairman, CEO, K. Steward<br />
Exploration LLC<br />
345 OGGS <strong>2011</strong> Christmas Party; Greg McMahan,<br />
Social Chairman SandRidge Energy, Inc.<br />
352 The 2012 5th Annual Real Deal Mid-Continent<br />
Prospect Expo<br />
354 Geologist Wives Association; Stacy J. Harris,<br />
Reporter<br />
377 <strong>Oklahoma</strong> City <strong>Geological</strong> Society Library<br />
<strong>Geological</strong> Treasure Chest<br />
<strong>Oklahoma</strong> Universities<br />
Michael Root creates the covers of the Shale Shaker. The cover for this Issue utilizes an<br />
image supplied by Michelle Dodd, Coordinator of Photography for Chesapeake Energy<br />
Corporation and is one of many contained within Chesapeake’s Visual Resource Center.<br />
The cover ties nicely with this Issue’s technical subject matter: “<strong>Oklahoma</strong> <strong>2011</strong><br />
<strong>Drilling</strong> <strong>Highlights</strong>,” by Dan T. Boyd, of the <strong>Oklahoma</strong> <strong>Geological</strong> <strong>Survey</strong>; and “The<br />
Geology and Deep Structure of the <strong>Oklahoma</strong> Ouachita Mountains – The SOPC 1-22<br />
Weyerhaeuser Well,” by Michael D. Allison, North Texas Sample Log Service, William<br />
H. Willis II, Manager - Southern Minerals, Weyerhaeuser Company, and Neil H.<br />
Suneson, of the <strong>Oklahoma</strong> <strong>Geological</strong> <strong>Survey</strong>.<br />
357 Shell Colloquium Series Schedule, Fall <strong>2011</strong>;<br />
Lisa Vassmer, Special Events and Donor<br />
Relations, ConocoPhillips School of Geology and<br />
Geophysics, The <strong>University</strong> of <strong>Oklahoma</strong>
Oil and Gas Exploration<br />
By: Dan T. Boyd, <strong>Oklahoma</strong> <strong>Geological</strong> <strong>Survey</strong>, (405) 325-8898 | [email protected]<br />
<strong>Oklahoma</strong> <strong>2011</strong><br />
<strong>Drilling</strong> <strong>Highlights</strong><br />
This article is a summary of <strong>Oklahoma</strong><br />
drilling activity that became public in<br />
<strong>2011</strong>. Any activity or key wells that were<br />
unavailable before January 1, 2012 will<br />
appear in next year’s summary. Except<br />
where noted, all data were supplied online<br />
by Petroleum Information/Dwights<br />
LLC dba IHS Energy Group, all rights<br />
reserved. A lax State attitude towards<br />
completion and production reporting has<br />
created extraordinarily long lag times in<br />
receiving these data, making analyses of<br />
recent activity difficult. Without the Energy<br />
Information Administration (E.I.A.)<br />
and especially the information provided<br />
by the IHS Energy a report of this kind<br />
would not be possible. Editing of this article<br />
was performed by Neil Suneson and<br />
cartography by Russell Standridge, both<br />
from the <strong>Oklahoma</strong> <strong>Geological</strong> <strong>Survey</strong>.<br />
General Activity<br />
The number of working drilling rigs is a<br />
Page 378 | March ~ April 2012<br />
fundamental barometer of oil and gas activity<br />
and Baker Hughes Company tracks<br />
monthly rotary drilling rig counts for regions<br />
all over the world. After a weekly<br />
peak of 219 in September, 2008 <strong>Oklahoma</strong>’s<br />
rig count reached a low of 69<br />
working rigs in September, 2009 (Boyd,<br />
2010). Since that time numbers have been<br />
steadily climbing, with the last week of<br />
<strong>2011</strong> reaching 195 working rigs. This has<br />
brought the annual average for the year up<br />
to 180 and marks the second year of major<br />
increases in drilling activity (Figure 1).<br />
<strong>Oklahoma</strong>’s rig count is now on a par with<br />
levels seen prior to the collapse of oil and<br />
gas prices that occurred at the end of 2008.<br />
In past years as many as 3/4s of all wells<br />
drilled in <strong>Oklahoma</strong> targeted gas, which<br />
has made its price the most important factor<br />
controlling drilling. This is no longer<br />
the case. Although the price for both gas<br />
and oil fell at the end of 2008, oil has<br />
largely recovered and gas has not (Figure<br />
2). Using the standard 6 MCF per barrel<br />
conversion, on a barrel of oil equivalency<br />
(BOE), in 2003 gas and oil prices were<br />
equal. While <strong>2011</strong> oil prices have risen<br />
to near their 2008 peak, gas is now selling<br />
for less than it did in 2003. In fact, on<br />
a BOE basis oil is now over three times<br />
more valuable than gas, and this will likely<br />
continue. Oil remains between $90 and<br />
$100 per barrel, but gas has again missed<br />
the usual winter price increase that occurs<br />
during the peak-heating season and has<br />
declined steadily since June (Figure 3).<br />
The latest estimate from the <strong>Oklahoma</strong><br />
Corporation Commission (OCC) places<br />
the average <strong>2011</strong> wellhead natural gas<br />
price in <strong>Oklahoma</strong> at approximately $4.67<br />
per MCF (Soltani, 2012) (Figure 2). This is<br />
an optimistic forecast as it is based mostly<br />
on prices in the first half of the year. Although<br />
the sharp fall that occurred in the<br />
second half of the year will be eased by<br />
hedged contracts and higher Btu gas, the
Figure 1. <strong>Oklahoma</strong> annual rotary rig count from 2002 to <strong>2011</strong>. Data from Baker Hughes (2012).<br />
Figure 2. <strong>Oklahoma</strong> annual average oil and gas price on a barrel of oil equivalency (BOE) from 2003 through <strong>2011</strong>. Data from Soltani<br />
(2012).<br />
March ~ April 2012 | Page 379
Oil and Gas Exploration<br />
<strong>Oklahoma</strong> <strong>2011</strong> <strong>Drilling</strong> <strong>Highlights</strong>, cont.<br />
Figure 3. Henry Hub natural gas spot price from January 3, <strong>2011</strong> through January 17, 2012. Adapted from Williams, (2012)<br />
average for <strong>2011</strong> will undoubtedly show a<br />
significant fall from 2010. The continued<br />
decline of Henry Hub Spot prices below<br />
$3/MCF is a disturbing development (Figure<br />
3). These prices result from an oversupply<br />
that is being maintained by the active<br />
drilling of gas shales and the horizontal<br />
development of liquids-rich unconventional<br />
plays which produce high volumes<br />
of associated gas. This activity continues<br />
throughout the country and shows no sign<br />
of abating.<br />
Although oil prices are now the main<br />
driver in maintaining drilling activity in<br />
the State, <strong>Oklahoma</strong> remains strongly<br />
gas-prone with gas representing 81% of<br />
our BOE production. Given the dominance<br />
of gas in <strong>Oklahoma</strong> industry earnings,<br />
State gross-production tax income<br />
Page 380 | March ~ April 2012<br />
can never fully recover until prices reach<br />
a level where gas-targeted drilling again<br />
becomes economically viable. There are<br />
prolific shale-gas plays across the U.S.,<br />
and like the Woodford in <strong>Oklahoma</strong>, these<br />
continue to be drilled (and produced) in<br />
an already glutted market. Price predictions<br />
are impossible, but certainly until<br />
the bulk of prospective shale-gas acreage<br />
is ‘held by production,’ which will afford<br />
operators the luxury of drilling infill wells<br />
only when prices are higher, there is little<br />
chance that prices will significantly recover.<br />
Languishing gas prices, high oil prices,<br />
and the expectation that these will continue<br />
has again pushed oil-targeted drilling<br />
higher. In <strong>2011</strong> gas drilling fell another 7%<br />
with oil rising by the same amount (Boyd,<br />
<strong>2011</strong>). Technically oil now accounts for<br />
over half of all drilling in the State (Figure<br />
4). However, if horizontal gas wells that<br />
were drilled to maximize oil/condensate/<br />
NGL production are excluded, this disparity<br />
would be even more pronounced. As<br />
will be discussed, with even the oiliest<br />
plays producing mostly gas and many of<br />
the ‘gas’ plays producing substantial volumes<br />
of hydrocarbon liquids, well classification<br />
becomes problematic. However,<br />
acreage expiration issues aside, it appears<br />
there are very few wells being drilled in<br />
<strong>Oklahoma</strong> today that are not relying on<br />
liquids production for economic viability.<br />
Water-injection and disposal-well drilling<br />
represents about 9% of all <strong>2011</strong> drilling<br />
(Figure 4) - a slight increase over previous<br />
years. High-rate water-disposal wells,
which invariably target the Arbuckle<br />
Group, are a prerequisite for production<br />
in all of the State’s horizontal plays. In<br />
fact, future drilling activity can often be<br />
gauged based on the number and location<br />
of disposal-well drilling permits. Dry and<br />
junked holes accounted for an additional<br />
7% of <strong>2011</strong> drilling. Although a large percentage<br />
of the wells drilled in <strong>Oklahoma</strong><br />
were classified as ‘New Field Wildcats,’<br />
because they are targeting unconventional,<br />
blanket reservoirs, this is something of<br />
a misnomer. (The term ‘unconventional’<br />
is used here to denote reservoirs in which<br />
the permeability is too low to permit<br />
fluid separation.) The overall 93%+ success<br />
rate that the industry has enjoyed is<br />
comparable to previous years and shows<br />
that drilling throughout <strong>Oklahoma</strong> continues<br />
to be overwhelmingly developmental<br />
(Figure 4). Even for isolated horizontal<br />
wells where economic risk is probably the<br />
greatest, the chance of a non-producing<br />
dry hole is usually less than the mechanical<br />
risk associated with drilling the well.<br />
Figure 4. <strong>Oklahoma</strong> <strong>2011</strong> well completion results (for wells reported through January 1, 2012).<br />
Data from IHS Energy (2012).<br />
Figure 5. <strong>Oklahoma</strong> oil and gas production on a barrel of oil equivalency (BOE) from 2005 to <strong>2011</strong>. Early data from Soltani, 2012. Later data taken from<br />
E.I.A., 2012.<br />
March ~ April 2012 | Page 381
Oil and Gas Exploration<br />
<strong>Oklahoma</strong> <strong>2011</strong> <strong>Drilling</strong> <strong>Highlights</strong>, cont.<br />
Figure 6. <strong>Oklahoma</strong> annual well completions comparing vertical and horizontal drilling from 2002 to <strong>2011</strong>. Note the resiliency of horizontal drilling<br />
despite lower prices over the last three years. Data from IHS Energy (2012) through January 1, 2012.<br />
Active Woodford Shale drilling, with<br />
279 horizontal completions registered so<br />
far in <strong>2011</strong>, combined with contributions<br />
from other high GOR horizontal plays, is<br />
projected to increase State gas production<br />
in <strong>2011</strong> by 46 BCF (7.7 MMBOE) over<br />
2010 (Figure 5). A continued concentration<br />
on oil/condensate-targeted drilling<br />
has also increased ‘oil’ production by almost<br />
2 MMBO and maintained a trend of<br />
increasing production that began in 2008.<br />
Oil production in <strong>Oklahoma</strong> declined<br />
continuously from the end of the drilling<br />
boom in 1984 until 2005. Since then higher<br />
prices have fueled increases in both vertical<br />
development and horizontal drilling<br />
that have increased production by 16%, or<br />
over 10 MMB per year.<br />
Page 382 | March ~ April 2012<br />
Reporting delays, which sometimes manifest<br />
as gross underreporting of production,<br />
have forced the use of the Energy Information<br />
Administration (EIA) data for annual<br />
State production volumes beginning<br />
in 2008 (Figure 5). The EIA develops<br />
production statistics from survey forms<br />
that are submitted by respondents on a<br />
monthly basis. These are combined with<br />
data from ‘other sources’ in order to estimate<br />
total State production. Although this<br />
is something of a black box, EIA volumes<br />
make more sense based on documented<br />
drilling and completion activity. They<br />
have online data through July, <strong>2011</strong> while<br />
the OCC as of this writing has yet to publish<br />
2010 production (E.I.A., 2012). OCC<br />
and EIA annual production numbers have<br />
diverged from near-agreement in 2007 to<br />
a difference of 3% in oil and 11% in gas<br />
in 2009. Such discrepancies make year-toyear<br />
projections impossible.<br />
Overall, the 876 wells thus far registered<br />
as having begun production in <strong>2011</strong><br />
have contributed about 23 thousand barrels<br />
(MBO) and 608 million cubic feet<br />
(MMCF) per day. This represents about<br />
12% of both State oil and State gas production,<br />
but reporting lags ensure that this<br />
percentage will be extremely conservative.<br />
The vast bulk of this new production<br />
is due to horizontal drilling. Despite the<br />
industry’s success in finding and producing<br />
oil and gas in <strong>2011</strong>, continued declines<br />
in many older wells reduces the annual
ise in overall production to about 3%.<br />
This underscores the need for continuous,<br />
high levels of drilling activity in order to<br />
maintain production levels. On a BOE<br />
basis natural gas production is four times<br />
that of oil (Figure 5), but the price differential<br />
inflates oil’s value to 43% of the total.<br />
Although this makes the industry and<br />
the State less dependent on natural gas, its<br />
price remains the key factor in the overall<br />
economic health of both.<br />
Reporting delays necessitate a revision of<br />
historic State drilling statistics each year.<br />
Since January 1, <strong>2011</strong> 987 additional completions<br />
were registered for 2010 and 163<br />
were added to 2009. In fact, in this year’s<br />
update it was necessary to add new completions<br />
to the totals registered for every<br />
year since 2002. Such delays and the fact<br />
that the proportion of reported and ‘not-<br />
yet-reported’ wells is inconsistent from<br />
year to year make annual comparisons of<br />
drilling activity difficult. As in previous<br />
years, to reduce the impact of reporting<br />
delays all completion numbers for <strong>2011</strong><br />
were increased by one third. Total completions<br />
in <strong>2011</strong> registered through January<br />
1, 2012 were slightly above those reported<br />
for 2010 at the same time last year.<br />
Although both year’s well counts will<br />
continue to rise, it appears that the number<br />
of completions that will ultimately<br />
be registered in <strong>2011</strong>, despite the higher<br />
proportion of (longer to drill) horizontal<br />
completions, will be greater than those for<br />
2010 (Figure 6).<br />
From 2002 through 2008 overall drilling<br />
activity generally increased, but this<br />
trend ended abruptly when prices fell at<br />
the end of 2008. The reduction in drilling<br />
was especially pronounced for vertical<br />
wells, which fell by half in 2009 (Figure<br />
6). The number of horizontal wells drilled<br />
also fell that year, but as a proportion of all<br />
drilling the rise in horizontal drilling was<br />
remarkably consistent until <strong>2011</strong> (Figure<br />
7). The jump in the percentage of horizontal<br />
well completions last year was as<br />
much due to less vertical activity as more<br />
horizontal. Since 2002 horizontal completions<br />
in <strong>Oklahoma</strong> have risen from 4% to<br />
41% of the total number of completions,<br />
and these now represent 62% of the total<br />
footage drilled in the State.<br />
Hundreds of companies drilled wells in<br />
<strong>2011</strong>, but Chesapeake Operating continues<br />
to be the most active operator (Figure 8).<br />
The 184 completions registered through<br />
January 1 st are comparable to those assigned<br />
to them in last year’s report, and<br />
Figure 7. <strong>Oklahoma</strong> annual horizontal drilling as a percentage of total completions from 2002 to <strong>2011</strong>. In terms of footage drilled <strong>2011</strong> horizontal wells<br />
accounted for nearly two thirds of State drilling. Data from IHS Energy (2012) through January 1, 2012.<br />
March ~ April 2012 | Page 383
Oil and Gas Exploration<br />
<strong>Oklahoma</strong> <strong>2011</strong> <strong>Drilling</strong> <strong>Highlights</strong>, cont.<br />
Figure 8. Top five operators in <strong>Oklahoma</strong> in <strong>2011</strong> based on the number of completions registered through January 1, 2012. Data from IHS Energy (2012).<br />
these represent over 8% of all drilling in<br />
the State. Chesapeake is active in almost<br />
every part of <strong>Oklahoma</strong>, but their drilling<br />
in <strong>2011</strong> was dominantly horizontal and<br />
was concentrated in the Desmoinesian<br />
Granite Wash, the Mississippian, and the<br />
Cleveland plays in the western part of the<br />
State.<br />
The remaining top operators in the State<br />
are much more focused in their drilling.<br />
Based on completion numbers the second<br />
most active operator in <strong>2011</strong> was Citation<br />
Oil and Gas who drilled or recompleted<br />
129 vertical, shallow, oil development<br />
wells and injectors in southern <strong>Oklahoma</strong>,<br />
mostly in Sho-Vel-Tum, Fitts, and Healdton<br />
Fields. SandRidge’s drilling activity<br />
was restricted exclusively to horizontal<br />
wells in the Mississippian play in Woods,<br />
Grant and Alfalfa Counties, which included<br />
37 water-disposal wells. Devon Energy<br />
was primarily focused on horizontal development<br />
of the Woodford Shale, mostly in<br />
their ‘Cana’ play located on the northeastern<br />
shelf of the Anadarko Basin. Round-<br />
Page 384 | March ~ April 2012<br />
ing out the top five operators in <strong>2011</strong>, New<br />
Dominion, another perennial member of<br />
the top-five-operators club, continues to<br />
focus exclusively on Misener/Hunton dewatering<br />
projects, most of these located in<br />
Seminole County (Figure 8).<br />
Horizontal <strong>Drilling</strong><br />
The petroleum industry in <strong>Oklahoma</strong> today<br />
is concentrating on low-permeability<br />
reservoirs that horizontal drilling and<br />
completion technology have made into<br />
attractive targets (Figure 9). This activity<br />
began in earnest about ten years ago<br />
with production from horizontal wells in<br />
the Hartshorne coal in the Arkoma Basin.<br />
<strong>Drilling</strong> here accelerated through the early<br />
part of the decade and was augmented<br />
by the Misener/Hunton dewatering play,<br />
which is located mostly in central <strong>Oklahoma</strong>.<br />
These two plays were followed in<br />
2006 by the Woodford Shale, which has<br />
seen development in the western Arkoma,<br />
Ardmore, and eastern Anadarko Basins.<br />
There is now an ever-lengthening list of<br />
other reservoirs that lend themselves to<br />
horizontal drilling and completion techniques.<br />
In addition to dozens of lesser<br />
targets, the most active include the Cleveland,<br />
Desmoinesian Granite Wash, and<br />
now the Mississippian, whose potential<br />
prospective area, which extends from<br />
northern <strong>Oklahoma</strong> through central Kansas,<br />
could become the largest of them all<br />
(IHS Energy, 2012).<br />
Horizontal drilling plays are attractive for<br />
many reasons. Because they exist in lowpermeability<br />
reservoirs in which fluid separation<br />
is not possible, the accumulations<br />
are continuous and the geological risk of a<br />
dry hole is essentially zero. Blanket reservoirs<br />
that are often quite thick also contain<br />
exceedingly large in-place gas and/or oil<br />
volumes, making the potential target large.<br />
Relatively small drainage areas, even after<br />
extensive fracture stimulation, means<br />
that many wells must be drilled in order<br />
to adequately develop such reservoirs. Although<br />
restricted drainage is not normally
Figure 9. Major <strong>Oklahoma</strong> horizontal drilling plays (> 100 completions) from 2002 to <strong>2011</strong>. Data from IHS Energy (2012) through January 1, 2012. All<br />
registered <strong>2011</strong> completion numbers increased by one third to account for reporting delays.<br />
an attractive characteristic, this allows<br />
companies to book proved undeveloped<br />
reserve volumes that are two to seven<br />
times those booked for the first well in the<br />
drilling unit. The result is a ‘dream scenario’<br />
for large operators whose regional leasing<br />
programs have captured hundreds of<br />
thousands or even millions of net mineral<br />
acres. With drainage areas established,<br />
locations are permitted and wells drilled<br />
based on lease expiration. Large numbers<br />
of dedicated drilling rigs are then able to<br />
turn reserve bookings into an assemblyline<br />
process in which the primary risk is<br />
mechanical. The thousands to tens-ofthousands<br />
of development locations generated<br />
from this ‘exploratory’ drilling create<br />
proved-undeveloped reserve volumes<br />
that quickly become astronomical.<br />
However, even horizontal plays are pricesensitive.<br />
Early production declines are<br />
very steep and drilling, operational (including<br />
water disposal) and acreage costs<br />
are high. Although most horizontal plays<br />
have ‘sweet spots’ that will remain economic<br />
in almost any price environment,<br />
based on the data at hand most of the prospective<br />
areas appear to be economically<br />
marginal in all but higher-price scenarios.<br />
With the fall in natural gas prices in late<br />
2008 operators have been forced to focus<br />
on horizontal plays that are more liquidsrich,<br />
which includes oil, condensate, and<br />
natural gas liquids (NGLs). However, because<br />
the targeted reservoirs have exceedingly<br />
low permeability, even the most liq-<br />
uids-rich horizontal plays produce mostly<br />
gas (Figure 10). This preponderance of<br />
natural gas, combined with its low price,<br />
makes it appear that operators have foregone<br />
short-term economics in favor of a<br />
strategy of holding acreage by production.<br />
Development drilling on this acreage can<br />
then wait until prices rise above whatever<br />
economic threshold the operator deems<br />
necessary to justify future activity.<br />
Almost every significant productive reservoir<br />
in the State has been drilled horizontally<br />
somewhere, but some have been<br />
systematically exploited in well-defined<br />
area(s) which can be described as geologic<br />
plays. Three of these, while still producing,<br />
are largely inactive in terms of drilling.<br />
March ~ April 2012 | Page 385
Oil and Gas Exploration<br />
<strong>Oklahoma</strong> <strong>2011</strong> <strong>Drilling</strong> <strong>Highlights</strong>, cont.<br />
Figure 10. <strong>Oklahoma</strong> major horizontal play cumulative production in MMBOE. Even the most hydrocarbon liquids-rich horizontal plays produce<br />
primarily gas. Natural gas liquid (NGL) production is not taken into account. Data from IHS Energy (2012).<br />
Chesapeake utilized horizontal-drilling<br />
technology in the mid- to late-1990’s to<br />
pursue mostly oil in the Sycamore carbonate<br />
in southern <strong>Oklahoma</strong>. Most of these<br />
wells are located in Sho-Vel-Tum Field<br />
and the Golden Trend. Another largely inactive<br />
horizontal play was made by EOG<br />
Resources in the Panhandle in western<br />
Texas County. Here they drilled about 70<br />
horizontal gas wells between 2000 and<br />
2003 in the Council Grove, mostly in Unity<br />
SW and Guymon-Hugoton Fields. In an<br />
aggressive dewatering project that utilizes<br />
horizontal drilling, New Dominion has<br />
targeted the Arbuckle in the <strong>Oklahoma</strong><br />
City Field. Here they have drilled 55 horizontal<br />
laterals from 17 surface locations<br />
and are disposing the water into the Arbuckle<br />
on the downthrown side of the field<br />
fault (Boyd, 2010).<br />
Using an arbitrary 100-well cutoff, there<br />
are six ‘major’ horizontal plays in Okla-<br />
Page 386 | March ~ April 2012<br />
homa with all but one still active. In addition,<br />
there are others (Marmaton, Tonkawa<br />
and Cherokee) that appear destined to<br />
reach this milestone soon. <strong>Drilling</strong> statistics<br />
for the most active horizontal plays<br />
over the last ten years are shown in Figure<br />
9. [The <strong>2011</strong> totals for each of those<br />
listed have been increased by 33% in an<br />
attempt to account for the reporting delays<br />
described previously.] Although the <strong>2011</strong><br />
projections are probably still conservative,<br />
the graph should be indicative of the<br />
direction that activity in these plays is taking.<br />
Figure 11 shows the productive areas<br />
occupied by the six ‘major’ horizontal<br />
plays at the end of 2010 and the completions<br />
that were added to these and all other<br />
reservoirs in <strong>2011</strong>. In the last month reported,<br />
usually between July and September<br />
of <strong>2011</strong>, <strong>Oklahoma</strong>’s 5,030 producing<br />
horizontal wells were making 35 MBO +<br />
1,819 MMCF per day. Even this under-reported<br />
volume represents 18% of State oil<br />
production and 35% of gas. The six major<br />
horizontal plays account for over 90% of<br />
this production. (All production cited are<br />
from IHS Energy, 2012.)<br />
Hartshorne Coal<br />
Located in the Arkoma Basin, Hartshorne<br />
coalbed methane has been exploited with<br />
horizontal wells for more than a decade.<br />
Low natural gas prices and negligible liquids<br />
production have depressed drilling<br />
activity in this play since the fall in natural<br />
gas prices in 2008. Although still the largest<br />
horizontal play with 1,691 wells, with<br />
only seven registered completions in <strong>2011</strong><br />
the Hartshorne coal has disappeared as<br />
an active play. There appears to be ample<br />
room to expand this play eastward (Figure<br />
11), but only a major increase in gas prices<br />
will see this area developed. The 1595<br />
actively producing horizontal Hartshorne
coal wells have an average cumulative recovery<br />
of 249 MMCF and a current rate of<br />
60 MCF per day.<br />
Woodford Shale<br />
The next largest horizontal drilling play in<br />
the State, and the one that is still by far<br />
the most active, is the Woodford Shale. In<br />
only six years it now boasts 1,639 producing<br />
wells of which 279 have been registered<br />
thus far for <strong>2011</strong>. Although the decline<br />
in gas prices has pushed most Woodford<br />
drilling into areas with higher liquid<br />
yields, activity remains brisk (Figure 9).<br />
Of the three primary producing trends,<br />
the western Arkoma Basin accounts for<br />
nearly three quarters of all Woodford<br />
wells. Here most of the <strong>2011</strong> activity was<br />
in and around areas of established production,<br />
which has linked several isolated<br />
producing areas and appears destined to<br />
become contiguous through central Pittsburg<br />
County (Figure 11). The most active<br />
operators in the Arkoma Basin in <strong>2011</strong><br />
were Newfield Exploration, XTO Energy<br />
and Devon Energy. The 1,119 horizontal<br />
Woodford producers in this area have<br />
average cumulative production of 897<br />
MMCF and a current rate of 751 MCF<br />
per day. Oil and condensate production in<br />
most of this area is negligible.<br />
The most active <strong>2011</strong> Woodford drilling<br />
occurred in the producing area pioneered<br />
by Devon Energy in the northeastern<br />
Anadarko Basin. This productive area has<br />
continued to expand from western Canadian<br />
County into southern Blaine and<br />
northern Caddo Counties. Previously isolated<br />
pods of production in southeastern<br />
Dewey County have merged and appear<br />
poised to link with the main area. Expansion<br />
along strike to the southeast through<br />
Grady County is also taking place, but<br />
this has not yet become as active. Devon<br />
Energy was by far the most active operator<br />
in this area in <strong>2011</strong>, drilling over<br />
half of all wells. There are now 346 horizontal<br />
Woodford wells producing in the<br />
Anadarko Basin and these have average<br />
cumulative production of 662 MMCF and<br />
7 MBO. Average per well production for<br />
the last reported month across this part of<br />
the play was 960 MCF + 11 BO per day.<br />
Although only wet gas production is reported,<br />
NGL yields in this play are significant<br />
with reported Btu contents as high as<br />
1350 per MCF.<br />
A third major concentration of horizontal<br />
Woodford Shale production is located<br />
along the northern edge of the Ardmore<br />
Basin in Carter, Johnston, and Marshall<br />
Counties where there is now a trend about<br />
40 miles long. In <strong>2011</strong> this was the least<br />
active part of the play with no major extensions<br />
to the previously established producing<br />
area (Figure 11). In the Ardmore<br />
Basin the most active horizontal Woodford<br />
operator is XTO Energy. The 111 producing<br />
wells registered in this area have average<br />
cumulative production of 662 MMCF<br />
and 7 MBO. Average per well production<br />
in the last reported month was 960 MCF +<br />
11 BO per day.<br />
Misener/Hunton<br />
Dewatering has found its greatest application<br />
in the Hunton (Misener/Hunton)<br />
reservoir where over 1,322 horizontal<br />
wells have now been drilled. This play has<br />
remained consistently strong, with over<br />
100 wells drilled in each of the last seven<br />
years (Figure 9). Production through reservoir<br />
dewatering has been pursued in this<br />
reservoir interval in a number of areas.<br />
Aside from a handful of wells in the Edmond<br />
West Field area, the bulk of recent<br />
activity has again concentrated in central<br />
<strong>Oklahoma</strong> mostly in and around Seminole,<br />
Lincoln, and Okfuskee Counties.<br />
As was the case last year, New Dominion<br />
was the dominant operator in this play, accounting<br />
for more than half of all horizontal<br />
Misener/Hunton wells drilled in <strong>2011</strong>.<br />
The second most active operator was<br />
OEX-1 LLC, who has 20 wells registered<br />
thus far. Activity for both operators was<br />
mostly relegated to previously established<br />
areas of production. Because this play requires<br />
a major drop in reservoir pressure<br />
before significant hydrocarbons are produced,<br />
a process that can take years, the<br />
productivity of new wells or areas cannot<br />
be ascertained based on initial potential<br />
tests. This is why none of these has ever<br />
made the annual list of significant wells.<br />
Horizontal Hunton and Misener/Hunton<br />
wells have produced about 5 MMBO and<br />
283 BCF, generating an average recovery<br />
per completion of 10 MBO + 551 MMCF<br />
(Figure 10).<br />
Cleveland<br />
Unlike the first three horizontal plays,<br />
the remaining have significant liquids<br />
production and so have tended to benefit<br />
from the relative strength of oil prices and<br />
their continued rise (Figure 2). Horizontal<br />
Cleveland Sandstone drilling, which fell<br />
by a third in 2009, is at an all-time high<br />
with at least 90 completions projected<br />
for <strong>2011</strong>. Like last year, recent activity<br />
has seen a major expansion of the older<br />
productive areas and the addition of new<br />
areas of production.<br />
The main productive area in Ellis County,<br />
which continues into Lipscomb and Ochiltree<br />
Counties in the Texas Panhandle,<br />
has recently been extended into northern<br />
Roger Mills County. The satellite area that<br />
began in southwestern Dewey has continued<br />
to grow and has now moved well into<br />
Custer County. Based on drilling trends<br />
it appears that these two productive areas<br />
may meet in the future. An isolated pod of<br />
horizontal Cleveland production in northern<br />
Logan County also saw the addition of<br />
two wells in <strong>2011</strong> (Figure 11), but its economic<br />
viability remains in doubt. Despite<br />
the high oil volumes registered on initial<br />
tests and their general classification as oil<br />
wells, on a BOE basis horizontal Cleveland<br />
production is two-thirds natural gas<br />
(Figure 10). To date the play’s cumulative<br />
production in <strong>Oklahoma</strong> is 7.7 MMBO +<br />
92 BCF (15.4 MMBOE), giving the average<br />
well a cumulative production of 29<br />
MBO + 347 MMCF.<br />
Granite Wash<br />
There are several reservoirs called ‘Granite<br />
Wash’ that are being explored for and<br />
March ~ April 2012 | Page 387
Oil and Gas Exploration<br />
<strong>Oklahoma</strong> <strong>2011</strong> <strong>Drilling</strong> <strong>Highlights</strong>, cont.<br />
103°<br />
37°<br />
6N<br />
5<br />
3<br />
2<br />
1N<br />
4<br />
103°<br />
developed in the Anadarko Basin. These<br />
reservoirs span nearly the entire Pennsylvanian<br />
System through the lower Permian<br />
and are comprised of thick, low-permeability<br />
sediments shed from the Wichita<br />
Uplift located to the south. As such they<br />
Page 388 | March ~ April 2012<br />
1E 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 E 25 24 23 22 21 20 19 18 17 16 15 14<br />
102°<br />
101°<br />
CIMARRON TEXAS BEAVER<br />
102°<br />
EXPLANATION<br />
101°<br />
HORIZONTAL PLAY ACTIVITY<br />
<strong>2011</strong> WELL MAJOR PLAYS FORMATION<br />
0 50 Miles<br />
0 50 Kilometers<br />
vary in lithology based on the formation<br />
that was exposed on the uplift at the time<br />
of deposition. ‘Granite Wash’ reservoirs<br />
have been produced from vertical wells<br />
for decades with varying levels of success,<br />
but the advent of horizontal drilling and<br />
2<br />
Other<br />
1<br />
Miss. Lime/Chat<br />
DM Granite Wash<br />
Cleveland<br />
Misener/Hunton<br />
Hartshorne<br />
Woodford<br />
23N<br />
17<br />
16<br />
15<br />
14<br />
13<br />
12<br />
11<br />
10<br />
9<br />
8<br />
7<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1N<br />
28 W 26<br />
22<br />
21<br />
20<br />
19<br />
18<br />
36°<br />
35°<br />
100°<br />
100°<br />
ELLIS<br />
!<br />
! ! ! !<br />
!<br />
!<br />
!<br />
! !<br />
!<br />
! !<br />
! !<br />
!<br />
!<br />
! !! ! !<br />
!<br />
!<br />
!! !<br />
!<br />
!<br />
! !! !! !<br />
!<br />
!<br />
!<br />
! !<br />
!<br />
!<br />
! !<br />
!<br />
!<br />
!<br />
ROGER<br />
MILLS<br />
HARPER<br />
BECKHAM<br />
HARMON<br />
!<br />
4<br />
!<br />
GREER<br />
WOODWARD<br />
JACKSON<br />
99°<br />
DEWEY<br />
completion techniques has reduced the<br />
dry hole risk and made some enormously<br />
economic.<br />
The Desmoinesian Granite Wash horizontal<br />
play, located in the deepest part of the<br />
6<br />
!<br />
!<br />
!<br />
!<br />
5<br />
!!<br />
!!!!!!<br />
!<br />
!! ! !<br />
!<br />
!! !<br />
!<br />
! ! !<br />
!<br />
!<br />
!<br />
!<br />
!<br />
!<br />
!!<br />
!<br />
!<br />
!<br />
!!!!<br />
!<br />
!<br />
WOODS<br />
CUSTER<br />
! !<br />
!<br />
! !<br />
!<br />
! !<br />
! !<br />
!<br />
!!!!<br />
!<br />
!! !<br />
!! !! !!<br />
!!<br />
!<br />
WASHITA<br />
KIOWA<br />
HOLLIS BASIN<br />
Figure 10. <strong>Oklahoma</strong> major horizontal play cumulative production in MMBOE. Even the most hydrocarbon liquids-rich horizontal plays produce<br />
primarily gas. Natural gas liquid (NGL) production is not taken into account. Data from IHS Energy (2012).<br />
3<br />
7<br />
! 8<br />
TILLMAN<br />
99°<br />
!<br />
!<br />
!!<br />
! !<br />
!<br />
!<br />
!<br />
!<br />
!<br />
M<br />
ANAD<br />
! ! ! !<br />
! ! ! ! !!<br />
!<br />
! !<br />
!<br />
!<br />
! ! ! ! !<br />
!<br />
10<br />
!<br />
! !<br />
! !! !<br />
!!<br />
!<br />
!<br />
!<br />
WICHITA<br />
UPLIFT<br />
CO
13 12 11 10 9 8 7 6 5 4 3 2 1W 1E 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25E<br />
3<br />
29N<br />
28<br />
!!!!<br />
! !<br />
! ! !<br />
!<br />
! ! !!! ! !!<br />
! ! ! !!!<br />
! !<br />
! !<br />
!<br />
!<br />
!<br />
! ! ! !!<br />
!<br />
!<br />
!<br />
!<br />
!<br />
!<br />
!<br />
!<br />
!<br />
! ! ! !! 11 ! ! !<br />
!<br />
AJOR<br />
ALFALFA<br />
!<br />
BLAINE<br />
CADDO<br />
MANCHE<br />
!!!!<br />
COTTON<br />
98° 97° 96°95°<br />
GRANT<br />
GARFIELD<br />
KINGFISHER<br />
34°<br />
!<br />
!! !<br />
! !<br />
ARKO BASIN<br />
& SHELF<br />
!<br />
! !<br />
!<br />
! !<br />
!!!! ! !<br />
! !! ! ! !<br />
! !<br />
!<br />
! ! ! !<br />
! !!! !<br />
!!! ! ! ! !<br />
!<br />
!!<br />
! ! ! !<br />
!<br />
! ! !<br />
! !<br />
!<br />
!<br />
!<br />
!<br />
!<br />
! !<br />
!!!<br />
!<br />
!<br />
!<br />
! ! ! !<br />
! !<br />
!<br />
!<br />
! !<br />
!<br />
!<br />
! ! !<br />
! ! ! ! ! !<br />
! ! ! ! !<br />
!<br />
! !<br />
!<br />
!<br />
!<br />
!<br />
!<br />
CANADIAN<br />
!<br />
!<br />
GRADY<br />
STEPHENS<br />
JEFFERSON<br />
98°<br />
! !!!<br />
! ! !!<br />
!<br />
!!<br />
!<br />
! !<br />
!<br />
!<br />
!<br />
!<br />
9!<br />
! !<br />
McCLAIN<br />
!<br />
12<br />
!!<br />
LOGAN<br />
!<br />
OKLAHOMA<br />
ARDMORE<br />
BASIN<br />
!<br />
!<br />
!<br />
! !!<br />
!<br />
KAY<br />
NOBLE<br />
PAYNE<br />
!<br />
!<br />
CLEVELAND<br />
GARVIN<br />
CARTER<br />
LOVE<br />
!<br />
!<br />
!<br />
!<br />
!!<br />
!<br />
13 !<br />
PAWNEE<br />
!<br />
!<br />
!<br />
! !<br />
!!<br />
LINCOLN<br />
!<br />
POTTAWATOMIE<br />
MURRAY<br />
! !<br />
! !<br />
!! !<br />
!! !<br />
!<br />
Anadarko Basin, is by far the most important<br />
of the ‘Granite Wash’ reservoirs<br />
to date. Starting in north-central Washita<br />
County, completion numbers grew by<br />
a third in the last year. Chesapeake was<br />
again the dominant operator in this play,<br />
14<br />
! !<br />
!<br />
!<br />
!<br />
!<br />
!<br />
!! !<br />
MARSHALL<br />
SEMINOLE<br />
!<br />
OSAGE<br />
PONTOTOC<br />
JOHNSTON<br />
!<br />
!<br />
CREEK<br />
OKFUSKEE<br />
!<br />
!!<br />
! !<br />
ARBUCKLE<br />
UPLIFT<br />
!<br />
!!<br />
!<br />
!<br />
!!<br />
!<br />
!!!!<br />
CHEROKEE<br />
PLATFORM<br />
!<br />
!<br />
COAL<br />
HUGHES<br />
!!!!<br />
! !<br />
!<br />
!<br />
!<br />
!<br />
!<br />
! !<br />
BRYAN<br />
TULSA<br />
! ! !<br />
!<br />
!<br />
OKMULGEE<br />
!<br />
!! !<br />
!! !<br />
!<br />
!!!! ! !!<br />
!<br />
!<br />
!!!<br />
!<br />
!<br />
!<br />
!<br />
WASHINGTON<br />
!<br />
!<br />
!<br />
ATOKA<br />
NOWATA CRAIG<br />
ROGERS<br />
PUSHMATAHA<br />
CHOCTAW<br />
MAYES<br />
OTTAWA<br />
WAGONER CHEROKEE<br />
ADAIR<br />
PITTSBURG<br />
MUSKOGEE<br />
McINTOSH<br />
LATIMER<br />
HASKELL<br />
97° 96° 95°<br />
! !<br />
! ! !<br />
!<br />
! ! !<br />
! !! !<br />
!<br />
! ! !!<br />
!<br />
! !<br />
!<br />
!<br />
accounting for nearly two thirds of the<br />
<strong>2011</strong> completions registered thus far. In<br />
addition to development within the main<br />
producing area, recent drilling has expanded<br />
this core area another township<br />
west into Roger Mills County (Figure 11).<br />
15<br />
ARKOMA<br />
BASIN<br />
OUACHITA<br />
MOUNTAINS<br />
UPLIFT<br />
DELAWARE<br />
OZARK<br />
UPLIFT<br />
27<br />
26<br />
25<br />
24<br />
23<br />
22<br />
21<br />
SEQUOYAH<br />
37°<br />
20<br />
19<br />
18<br />
LE FLORE<br />
17<br />
McCURTAIN<br />
36°<br />
16<br />
15<br />
14<br />
13<br />
12<br />
11<br />
10<br />
9<br />
8<br />
7<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1N<br />
1S<br />
2<br />
3<br />
4<br />
5<br />
6<br />
7<br />
8<br />
9<br />
35°<br />
34°<br />
10S<br />
Activity was also brisk along the Texas<br />
border, but efforts to connect these two<br />
areas with economic production appear to<br />
have failed so far.<br />
Vertical wells have produced Desmoine-<br />
March ~ April 2012 | Page 389
Oil and Gas Exploration<br />
<strong>Oklahoma</strong> <strong>2011</strong> <strong>Drilling</strong> <strong>Highlights</strong>, cont.<br />
sian Granite Wash since the mid-1980s,<br />
but horizontal production only began in<br />
April 2007 (Figure 9). Through August of<br />
last year the wells in this play registered<br />
an average recovery of 727 MMCF and 55<br />
MBC, with most of these on line for less<br />
than two years. Having the highest average<br />
liquids production for any horizontal<br />
play in the State, it is notable for spectacular<br />
rates on initial potential tests and wells<br />
with payouts often measured in months.<br />
Although its high condensate yield makes<br />
this horizontal play particularly attractive,<br />
like the Cleveland, on a BOE basis it is<br />
still about two-thirds gas (Figure 10).<br />
Although the Desmoinesian Granite Wash<br />
is the only horizontal wash play with a<br />
significant production history, there are<br />
several others that appear destined to expand.<br />
Naming conventions make these<br />
difficult to distinguish from non-wash<br />
reservoirs, and some may overlap with<br />
reservoirs to the north. However, wells<br />
located in Beckham, Washita, Caddo, and<br />
southern Roger Mills and Custer Counties<br />
likely have a southern source and so could<br />
be called ‘wash’ reservoirs. In addition to<br />
those identified as Desmoinesian (Series)<br />
and Granite Wash (which is assumed to<br />
also be Desmoinesian Granite Wash), this<br />
area includes reservoirs identified by operators<br />
as Atoka, Skinner, Cherokee, Missouri,<br />
Pennsylvanian Missourian, Hoxbar,<br />
Marchand, and Hogshooter. Reservoirs<br />
using the same names produce in horizontal<br />
wells in northern Roger Mills and Ellis<br />
Counties, and although their productive<br />
characteristics are similar, these are probably<br />
sourced from the north and/or east<br />
and so are not true ‘wash’ reservoirs.<br />
Mississippian (Lime / Chat)<br />
A much more scattered horizontal play,<br />
but the one that has experienced the greatest<br />
drilling surge in the last year, is targeting<br />
what is identified as the Mississippian<br />
Lime and Chat. These are different<br />
reservoirs, but are combined here due to<br />
inconsistent naming. The Chat produces<br />
horizontally mostly in Osage and Kay<br />
Counties and this part of the play appeared<br />
Page 390 | March ~ April 2012<br />
to be relatively quiet in <strong>2011</strong>. It is a thin,<br />
siliceous zone of variable reservoir quality<br />
that intermittently develops on top of<br />
the Mississippian Lime. Like the Mississippian<br />
Lime beneath, it has produced for<br />
decades from vertical wells. It can now<br />
be identified seismically, and horizontal<br />
wells drilled on seismic anomalies have<br />
allowed operators to maximize exposure<br />
to the Chat. Because it has natural permeability<br />
wells are usually untreated.<br />
The Mississippian Lime is a regional carbonate<br />
found across most of the State. It<br />
has produced from vertical wells for decades,<br />
albeit usually marginally. Horizontal<br />
wells have the potential to make this<br />
reservoir economic over a much wider<br />
area. Although it can develop porosity and<br />
permeability, reservoir quality tends to be<br />
poor. It is often fractured, and horizontal<br />
drilling affords the opportunity to enhance<br />
natural fractures with multi-stage acid<br />
fracture stimulations. The Mississippian<br />
Lime is thick and oil-prone across much<br />
of the northern half of the State, giving<br />
this formation regional prospectivity. Given<br />
its wide extent, the play has the potential<br />
to become the largest and perhaps the<br />
most productive horizontal drilling play in<br />
<strong>Oklahoma</strong> (Figure 11).<br />
A total of 157 horizontal Mississippian<br />
wells have so far been registered for <strong>2011</strong>,<br />
bringing the total number of completions<br />
to 285. Recent wells were mostly clustered<br />
around the main area of production<br />
located in Woods and Alfalfa Counties and<br />
this activity has moved across the border<br />
into Kansas. The core area is dominated<br />
by Chesapeake and SandRidge, each of<br />
whom have leaseholds exceeding one million<br />
net acres. The core productive area<br />
is expanding to the east and south with<br />
isolated activity as far east as Payne and<br />
Pawnee Counties. Although 241 wells are<br />
now on production, the vast majority have<br />
been online for less than a year. Average<br />
cumulative per well recoveries now stand<br />
at 13 MBO + 113 MMCF with production<br />
in the last reported month at 25 BO +<br />
306 MCF per day. Although it is the oiliest<br />
of the horizontal plays, on a BOE basis<br />
Mississippian production is still 60% gas<br />
(Figure 10).<br />
The <strong>Oklahoma</strong> oil and gas industry has<br />
applied horizontal-drilling technology to<br />
dozens of other reservoirs across the State<br />
and will continue to test the limits of where<br />
this can be applied. There are sweet spots,<br />
but a large proportion of the horizontal<br />
wells drilled thus far appear to be marginal<br />
to clearly sub-economic. However, low<br />
productivity can be as much due to the<br />
manner in which the wells are drilled and<br />
completed as any inherent geological factors.<br />
The learning curve from first (often<br />
marginal) production to more consistent,<br />
economic development is a process measured<br />
in years. There are a number of reservoirs<br />
that were not discussed that, based<br />
on initial potentials, are showing promise.<br />
Wells tapping these reservoirs, which are<br />
classified as ‘Others’ in Figure 9 and are<br />
shown as black pluses in Figure 11, may<br />
develop into larger horizontal-drilling<br />
plays in the future.<br />
Significant Wells in <strong>2011</strong><br />
The following is a list of what are believed<br />
to be among the most significant<br />
wells registered for <strong>Oklahoma</strong> in <strong>2011</strong>.<br />
Although all were registered in the past<br />
year, due to reporting delays, some have<br />
earlier completion dates. The wells listed<br />
were identified from a weekly review of<br />
the IHS Energy EnergyNews on Demand<br />
Midcontinent activity reports released<br />
online throughout the year. An initial list<br />
of 152 candidates compiled from this<br />
publication was distilled to a final total<br />
of 15. Such a list is subjective and may<br />
miss wells that could eventually become<br />
noteworthy. Due to confidentiality issues,<br />
wells that may be notable for technical<br />
reasons will probably be missed. For instance,<br />
those that confirm some new type<br />
of trapping style or proved the benefit of a<br />
new drilling or completion technique will<br />
be difficult to identify until information is<br />
disseminated years from now.<br />
Horizontal wells have occupied a progres-
sively larger share of the significant well<br />
listings each year. In 2010, and now <strong>2011</strong>,<br />
they comprise all of the ‘all-star’ wells in<br />
this report. Those listed here have either<br />
significantly expanded what appears to<br />
be economic production in an established<br />
horizontal play or in some way constrained<br />
its ultimate extent. To keep this<br />
listing to a manageable size, in some cases<br />
related nearby wells were added to the<br />
discussion. Wells with production histories<br />
are given precedence over those with<br />
only impressive initial potential tests and,<br />
where available, the volumes reported are<br />
given. Please refer to Figure 11 for orientation<br />
during the following discussion.<br />
1) Sec. 13-3N-21ECM (Beaver County):<br />
In one of the State’s most active horizontal<br />
drilling plays QEP Energy extended Marmaton<br />
production two miles to the northwest<br />
with the completion of their Bobbitt<br />
Trust #3-13H well. As well as expanding<br />
the productive area, this well has also established<br />
a new highest initial potential<br />
with a daily rate of 1,063 BO per day. No<br />
gas, water, or stimulation was recorded for<br />
this well, which was completed in a 4,508’<br />
lateral located at a true vertical depth<br />
(TVD) of 6,000’.<br />
2) Sec. 6-1N-20ECM (Beaver County):<br />
In a related development, Unit Petroleum<br />
made a horizontal Marmaton completion<br />
in the State of <strong>Oklahoma</strong> #1-H that is 15<br />
miles west of the main play. This well is<br />
located on the southern limit of a small<br />
pod of vertical Marmaton wells assigned<br />
to the Camrick District that were drilled<br />
in 1970 and 1971. Since that time the five<br />
wells in Section 6 have produced about<br />
172 MBO. This new horizontal well had<br />
an initial potential on pump of 284 BO<br />
(38 O API) + 93 MCF + 1,740 BW per day<br />
from a 2,218’ lateral at a TVD of 5,890’.<br />
It was fracture stimulated with 650,000<br />
pounds of sand.<br />
3) Sec. 4-14N-24W (Roger Mills County):<br />
Classified for now as part of the same<br />
horizontal Marmaton play located to the<br />
north, operators drilled about two dozen<br />
wells in southern Ellis County and have<br />
now pushed production into central Roger<br />
Mills County. Although here it may have<br />
a southern provenance, making it a Marmaton<br />
‘wash’, it is still simply identified<br />
as Marmaton. The Cordillera Energy Galileo<br />
#2-4HA had an initial potential of 367<br />
BO + 5.36 MMCF per day with no water<br />
reported. The well has a 2,200’ lateral located<br />
at a TVD of 11,150’. Cordillera has<br />
reported that the NGL yield from the gas<br />
at this well is about 93 barrels per MMCF,<br />
giving it nearly 500 barrels of NGL production<br />
initially. This is comparable to<br />
the yield reported for Marmaton wells in<br />
Ellis County. The number of horizontal<br />
Marmaton wells nearly tripled in <strong>2011</strong><br />
with Unit Petroleum and EOG Resources<br />
operating most of them. With a total of 86<br />
completions registered thus far this play<br />
will undoubtedly become one of the ‘major’<br />
horizontal plays in next year’s report.<br />
4) Sec. 23-26N-24W (Harper County): In<br />
another horizontal play that will probably<br />
reach the 100-well hurdle and become<br />
‘major’ in the next year or two, Cherokee<br />
completions also more than tripled<br />
in <strong>2011</strong>. The 45 completions in <strong>2011</strong> are<br />
mostly scattered in three areas in southern<br />
Roger Mills, southern Ellis, and western<br />
Harper Counties. Apache completed their<br />
Zoldoske #4-23H for 525 BO (45 O API)<br />
+ 681 MCF + 117 BW per day. This well,<br />
which is the southernmost in the Harper<br />
County trend, shows that this play is far<br />
from defined. The well was completed in a<br />
4,482’ lateral at a TVD of 6,750’ and acidfraced<br />
in ten stages with about 1.2 million<br />
pounds of sand. In six months this well<br />
produced about 31 MBO + 77 MMCF<br />
with a rate in the last complete month of<br />
117 BO + 3.0 MMCF per day.<br />
5) Sec. 17-11N-21W (Beckham County):<br />
In a major westward extension of liquidsrich<br />
Desmoinesian Granite Wash production,<br />
Apache drilled a pair of excellent<br />
wells from the same surface location. Both<br />
completed in June <strong>2011</strong>, the Smith 1-16H<br />
and 1-17H are virtual twins with initial<br />
potentials of 1,115 BC + 12,634 MCF +<br />
596 BW and 1,095 BC + 12,582 MCF +<br />
554 BW per day. Both wells have a TVD<br />
of about 13,000’ and 4,000’ laterals that<br />
were fracture stimulated with 3.1 to 3.3<br />
million pounds of sand. The heart of the<br />
play remains in Washita County, but these<br />
wells are the first to establish high liquids<br />
production in Beckham County, which until<br />
now has been dominantly gas. The two<br />
wells have produced 564 and 574 MMCF<br />
in less than two months with a combined<br />
recovery of 34 MBC. In the last complete<br />
month each well was producing about 11.6<br />
MMCF per day with a combined daily<br />
rate of 1,082 BC. Although Desmoinesian<br />
Granite Wash production extends westward<br />
into the Texas Panhandle, the eastern<br />
limit of this play seems to be anchored in<br />
the center of township 11N-16W. It is not<br />
known if this limit is geological or lease<br />
related, but high condensate-yield wells<br />
have been drilled by Chesapeake right up<br />
to this limit.<br />
6) Sec. 14-11N-23W (Roger Mills County):<br />
Along the trend of the Desmoinesian,<br />
Hogshooter and other horizontal ‘Granite<br />
Wash’ plays operators have been drilling<br />
wells targeting what they are calling<br />
Missouri Granite Wash or Cottage Grove<br />
sand. The most notable of these wells was<br />
drilled by Crawley Petroleum. The Moore<br />
#5-14H had an initial potential of 1,485<br />
BO + 5,717 MCF + 710 BW per day in a<br />
reservoir identified as the Cottage Grove<br />
sand. This well has a 5,260’ lateral at a<br />
TVD of 11,322’ that was fraced using<br />
about 2.4 million pounds of sand.<br />
7) Sec. 11-16N-20W (Dewey County):<br />
Horizontal Tonkawa completions, which<br />
doubled in <strong>2011</strong>, have historically been<br />
situated in Roger Mills and southern Ellis<br />
Counties. <strong>2011</strong> saw a major westward<br />
development of the play into southwestern<br />
Dewey County. Chesapeake drilled what<br />
appears to be the best of the nine wells<br />
in this area with their Lauder #1-11H.<br />
Completed in a 4,260’ lateral at a TVD of<br />
8,240’ the well had an initial potential on<br />
gas lift of 510 BO (46 O API) + 420 MCF +<br />
1,260 BW per day after a fracture stimulation<br />
that used 4.2 million pounds of sand.<br />
In four months of production this well,<br />
apparently choked back, has cumulative<br />
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Oil and Gas Exploration<br />
<strong>Oklahoma</strong> <strong>2011</strong> <strong>Drilling</strong> <strong>Highlights</strong>, cont.<br />
production of only 76 MMCF with an average<br />
rate of about 700 MCF per day with<br />
no liquids production noted.<br />
8) Sec. 33-14N-18W (Custer County):<br />
There are now over 300 horizontal Cleveland<br />
completions with 65 registered thus<br />
far for <strong>2011</strong>. Most of the activity took<br />
place within established producing areas,<br />
but the most significant extension seems<br />
to be in central Custer County where<br />
Chesapeake now has four months of production<br />
history on a <strong>2011</strong> discovery. The<br />
SGD #1-33H was completed in April from<br />
a 4,483’ lateral at a TVD of 10,591’ with<br />
2.2 million pounds of sand. After an initial<br />
flowing potential of 547 barrels of 46 O<br />
API oil + 1,153 MCF + 1,102 BW per day<br />
it has produced 23 MBO + 60 MMCF. In<br />
the last reported month it was still producing<br />
at a rate of 124 BO + 300 MCF per<br />
day. Several additional wells have since<br />
been permitted in the area.<br />
9) Sec. 11-3N-5W (Grady County): What<br />
began as the Woodford Shale ‘Cana’ play<br />
in western Canadian County is spreading<br />
over an ever-widening swath of the eastern<br />
shelf of the Anadarko Basin. The core<br />
area, which now comprises the better part<br />
of a dozen townships in Canadian, Blaine<br />
and Caddo Counties, appears to have been<br />
extended to the extreme southern corner<br />
of the basin some 60 miles to the southeast.<br />
The Continental Resources Lambakis<br />
#1-11H had an initial potential from<br />
the Woodford of 5.4 MMCF + 160 BC per<br />
day with no water reported. The well was<br />
produced after a ten-stage fracture stimulation<br />
from a 4,200’ lateral at a TVD of<br />
15,128’. Continental has indicated that the<br />
gas from the Lambakis has a Btu content<br />
of 1,350 (~ 170 barrels NGL per MMCF)<br />
and is commanding a price of $6.25/MCF.<br />
In three and a half months of production<br />
the Lambakis made about 12 MBO + 319<br />
MMCF with a rate in the last complete<br />
month of about 100 BC + 4.2 MMCF per<br />
day.<br />
10) Sec. 32-18N-15W (Dewey County):<br />
The ‘Cana’ Woodford Shale play has also<br />
moved well into Dewey County with Dev-<br />
Page 392 | March ~ April 2012<br />
on drilling the two most northerly wells<br />
so far. Their Rauh #1-32H had an initial<br />
potential of 147 BO + 3,253 MCF + 908<br />
BW per day. The Btu content of the gas<br />
was not reported, but the NGL production<br />
will probably be at least double what is<br />
reported as the initial ‘oil’ rate. This well<br />
was completed from a 4,292’ lateral at a<br />
TVD of 11,677’ and a fracture treatment<br />
using 2.2 million pounds of sand. The<br />
best well in this extension of the play is<br />
the Continental Resources #1-2H Brown<br />
which was drilled about three miles southwest<br />
in Section 2-17N-16W. After an initial<br />
potential of 3,772 MCFPD this well<br />
produced 1.5 BCF in two years and was<br />
making about 1 MMCFPD in the last reported<br />
month (September, <strong>2011</strong>).<br />
11) Sec. 34-26N-13W (Woods County):<br />
Eagle Energy recorded the highest initial<br />
potential of any horizontal Mississippian<br />
well with the completion of their Longhurst<br />
#3H-34. This well flowed 2,225<br />
barrels of 32 O API oil with 4,767 MCF +<br />
2,789 BW per day. Completed in a 3,615’<br />
lateral at a TVD of 5,806’, it was acidfraced<br />
with 12,500 barrels of fluid and<br />
160,000 pounds of sand. This well is less<br />
than a mile west of another Eagle Energy<br />
well in section 35. Completed in 2010,<br />
the Mary Beth #1-H was completed in a<br />
2,307’ lateral (TVD – 5,807’) pumping<br />
at a rate of 50 BO + 318 MCF + 3,212<br />
BW per day. Oriented north-south like the<br />
Longhurst, the Mary Beth is shown as a<br />
Chat well completed with a 24,500 barrel<br />
‘acid-frac’ in which no proppant was reported.<br />
There are many examples of wildly<br />
different initial potentials in adjacent<br />
wells in the Mississippian, as well as other<br />
horizontal plays, but this is the largest<br />
seen thus far. The underlying cause is not<br />
known, and neither well has any recorded<br />
production, but this certainly highlights a<br />
pitfall in blanket reserve assignments to<br />
regional plays.<br />
12) Sec. 3-23N-4W (Garfield County):<br />
Establishing the highest horizontal Mississippian<br />
initial potential in the county,<br />
Plymouth Exploration completed their Sebranek<br />
#1-3H flowing at 1,031 BO (44 O<br />
API) + 1,327 MCF + 3,799 BW per day.<br />
This well was completed in a 3,302’ lateral<br />
at a TVD of 5,774’ with a nine-stage,<br />
750,000 pound acid-fracture stimulation.<br />
The Sebranek seems to confirm at least a<br />
step in a bridge that may eventually link<br />
the western and eastern Mississippian play<br />
areas. However, it is a direct offset to a<br />
2010 well, the Wicklund #1-34H Massie,<br />
that had an initial potential on pump of 90<br />
BOPD. This well produced only 6 MBO<br />
+ 12 MMCF in 17 months, with a rate in<br />
the last month of 6 BOPD. It is not known<br />
whether the drilling/completion technique<br />
or some geologic factor is responsible for<br />
this discrepancy.<br />
13) Sec. 22-23N-4E (Pawnee County):<br />
Territory Resources pushed horizontal<br />
Mississippian production nine miles<br />
northeast of Pablo Energy’s initial discovery<br />
(Ripley #1H-31) in this westernmost<br />
part of the play (Boyd, <strong>2011</strong>). Their Beast<br />
#1-27H had an initial potential on pump<br />
of 585 barrels of 40 O API oil with 1,000<br />
MCF + 2,300 BW per day. In this area the<br />
TVD of the 3,689’ lateral was only 3,674’,<br />
which was stimulated with an acid frac<br />
treatment using 122,000 pounds of sand.<br />
The Beast produced 137 BOPD in its first<br />
month, but in its last month was down to<br />
44 BOPD. Cumulative production in four<br />
months is about 8 MBO with no reported<br />
gas. The Ripley well (Sec. 31-22N-4E),<br />
which began Mississippian horizontal activity<br />
in this part of the State, in 20 months<br />
has produced about 54 MBO with a last<br />
reported rate of 24 BOPD. It too has no<br />
reported gas production.<br />
14) Sec. 21-18N-3E (Payne County): A<br />
horizontal Woodford Shale well that is off<br />
the beaten track was drilled by Calyx Energy<br />
with their State WFD #16-1H. With<br />
a TVD of only 4,379’ the 3,700’ lateral<br />
was acid-fraced with 685,000 pounds of<br />
sand and had an initial potential on pump<br />
of 310 BO (36 O API) + 150 MCF + 1,500<br />
BW per day. A true Woodford oil well, this<br />
well does not yet have any reported production.<br />
15) Sec. 16-7N-17E (Pittsburg County):
Petroquest Energy pushed the main productive<br />
area of the horizontal Woodford<br />
Shale in the Arkoma Basin eastward with<br />
the drilling of several wells in <strong>2011</strong>. The<br />
best of these, their Tonya #1-20H, came<br />
References Cited<br />
Baker Hughes, 2012, <strong>2011</strong> Average Rotary <strong>Drilling</strong> Rig Count,<br />
Accessed at: http://gis.bakerhughesdirect.com/Reports/StandardReport.aspx<br />
Boyd, D. T., 2010, <strong>Oklahoma</strong> 2009 <strong>Drilling</strong> <strong>Highlights</strong>, Shale<br />
Shaker, Vol. 60, No. 5 pp. 199-209.<br />
Boyd, D. T., <strong>2011</strong>, <strong>Oklahoma</strong> 2010 <strong>Drilling</strong> <strong>Highlights</strong>, Shale<br />
Shaker, Vol. 61, No. 5 pp. 293-306.<br />
E.I.A. (Energy Information Administration), 2012, Annual<br />
<strong>Oklahoma</strong> Production of Crude Oil and natural Gas: Accessed<br />
January, 2012 http://www.eia.gov/dnav/pet/hist/LeafHandler.<br />
ashx?n=pet&s=mcrfpok1&f=a http://www.eia.gov/dnav/ng/ng_<br />
prod_sum_dcu_sok_a.htm<br />
Chet<br />
Dan T.<br />
Wallace<br />
Boyd<br />
on for 6,293 MCF + 1,259 BW per day.<br />
The well was completed with a fracture<br />
stimulation using 2.6 million pounds of<br />
sand on a 4,993’ lateral located at a TVD<br />
of 8,653’. Although there is not yet any<br />
Biographical Sketch<br />
recorded production for these wells, they<br />
appear to be as good as any in the play and<br />
show that there is still ample room to expand<br />
horizontal Woodford Shale production<br />
in this part of the State.<br />
IHS Energy, 2012, Well Data supplied online by Petroleum<br />
Information/Dwights LLC dba IHS Energy Group, January 1,<br />
2012, all rights reserved. http://energy.ihs.com/<br />
Northcutt, R. A.; and Campbell, J. A., 1995, Geologic provinces<br />
of <strong>Oklahoma</strong>: <strong>Oklahoma</strong> <strong>Geological</strong> <strong>Survey</strong> Open-File Report<br />
5-95.<br />
Soltani, Cameron, 2012 <strong>Oklahoma</strong> Corporation Commission, Oil<br />
and gas information: pricing data through July, <strong>2011</strong>, accessed at:<br />
http://www.occeweb.com/og/ogmonthytd.pdf<br />
Williams, James L., 2012 WTRG Economics, Henry Hub Spot<br />
Natural Gas Price graph, accessed at: http://www.wtrg.com/daily/<br />
oilandgasspot.html<br />
Dan Boyd is a petroleum geologist with the <strong>Oklahoma</strong> <strong>Geological</strong> <strong>Survey</strong>, where he<br />
has been employed since 2001. Dan received his Master of Science degree in geology<br />
from the <strong>University</strong> of Arizona in 1978. He spent the first 22 years of his career as an<br />
exploration and development geologist in the petroleum industry. From 1978 through<br />
1991 he worked on a variety of areas in the United States from Houston, Dallas, and<br />
<strong>Oklahoma</strong> City for Mobil Oil and Union Texas Petroleum. In 1991 he moved overseas,<br />
working in Karachi, Pakistan for four years and Jakarta, Indonesia for the following<br />
four. He returned with his family to the U.S. in 1999 with Arco (the successor to Union<br />
Texas) where, until Arco’s sale to BP, he worked the offshore Philippines from Plano,<br />
Texas.<br />
Since joining the OGS staff Dan has presented and published several reports on<br />
the history, status, and future outlook of the oil and gas industry in <strong>Oklahoma</strong>. He<br />
chaired the 2002 Symposium on Cherokee Reservoirs in the Southern Midcontinent<br />
(OGS Circular 108), and prepared and presented a workshop on the Booch gas play<br />
in southeastern <strong>Oklahoma</strong> (Special Publication 2005-1). His most recent study of oil<br />
reservoirs and recovery efficiencies (Shale Shaker May/June, 2008) demonstrates<br />
that large volumes of producible oil remain in the ground and that a major barrier to<br />
finding and producing this oil is shortcomings in State oil and gas data. Dan serves<br />
on the board of Energy Libraries Online (ELO) from a conviction that the long term<br />
success of the <strong>Oklahoma</strong> industry depends on improving both the completeness and<br />
accessibility of State oil and gas data.<br />
March ~ April 2012 | Page 393
120 North Robinson, Suite 900 Center<br />
<strong>Oklahoma</strong> City, OK 73102