2011 Drilling Highlights - Oklahoma Geological Survey - University ...

Oil and Gas Exploration <strong>Oklahoma</strong> <strong>2011</strong> <strong>Drilling</strong> <strong>Highlights</strong>, cont. sian Granite Wash since the mid-1980s, but horizontal production only began in April 2007 (Figure 9). Through August of last year the wells in this play registered an average recovery of 727 MMCF and 55 MBC, with most of these on line for less than two years. Having the highest average liquids production for any horizontal play in the State, it is notable for spectacular rates on initial potential tests and wells with payouts often measured in months. Although its high condensate yield makes this horizontal play particularly attractive, like the Cleveland, on a BOE basis it is still about two-thirds gas (Figure 10). Although the Desmoinesian Granite Wash is the only horizontal wash play with a significant production history, there are several others that appear destined to expand. Naming conventions make these difficult to distinguish from non-wash reservoirs, and some may overlap with reservoirs to the north. However, wells located in Beckham, Washita, Caddo, and southern Roger Mills and Custer Counties likely have a southern source and so could be called ‘wash’ reservoirs. In addition to those identified as Desmoinesian (Series) and Granite Wash (which is assumed to also be Desmoinesian Granite Wash), this area includes reservoirs identified by operators as Atoka, Skinner, Cherokee, Missouri, Pennsylvanian Missourian, Hoxbar, Marchand, and Hogshooter. Reservoirs using the same names produce in horizontal wells in northern Roger Mills and Ellis Counties, and although their productive characteristics are similar, these are probably sourced from the north and/or east and so are not true ‘wash’ reservoirs. Mississippian (Lime / Chat) A much more scattered horizontal play, but the one that has experienced the greatest drilling surge in the last year, is targeting what is identified as the Mississippian Lime and Chat. These are different reservoirs, but are combined here due to inconsistent naming. The Chat produces horizontally mostly in Osage and Kay Counties and this part of the play appeared Page 390 | March ~ April 2012 to be relatively quiet in <strong>2011</strong>. It is a thin, siliceous zone of variable reservoir quality that intermittently develops on top of the Mississippian Lime. Like the Mississippian Lime beneath, it has produced for decades from vertical wells. It can now be identified seismically, and horizontal wells drilled on seismic anomalies have allowed operators to maximize exposure to the Chat. Because it has natural permeability wells are usually untreated. The Mississippian Lime is a regional carbonate found across most of the State. It has produced from vertical wells for decades, albeit usually marginally. Horizontal wells have the potential to make this reservoir economic over a much wider area. Although it can develop porosity and permeability, reservoir quality tends to be poor. It is often fractured, and horizontal drilling affords the opportunity to enhance natural fractures with multi-stage acid fracture stimulations. The Mississippian Lime is thick and oil-prone across much of the northern half of the State, giving this formation regional prospectivity. Given its wide extent, the play has the potential to become the largest and perhaps the most productive horizontal drilling play in <strong>Oklahoma</strong> (Figure 11). A total of 157 horizontal Mississippian wells have so far been registered for <strong>2011</strong>, bringing the total number of completions to 285. Recent wells were mostly clustered around the main area of production located in Woods and Alfalfa Counties and this activity has moved across the border into Kansas. The core area is dominated by Chesapeake and SandRidge, each of whom have leaseholds exceeding one million net acres. The core productive area is expanding to the east and south with isolated activity as far east as Payne and Pawnee Counties. Although 241 wells are now on production, the vast majority have been online for less than a year. Average cumulative per well recoveries now stand at 13 MBO + 113 MMCF with production in the last reported month at 25 BO + 306 MCF per day. Although it is the oiliest of the horizontal plays, on a BOE basis Mississippian production is still 60% gas (Figure 10). The <strong>Oklahoma</strong> oil and gas industry has applied horizontal-drilling technology to dozens of other reservoirs across the State and will continue to test the limits of where this can be applied. There are sweet spots, but a large proportion of the horizontal wells drilled thus far appear to be marginal to clearly sub-economic. However, low productivity can be as much due to the manner in which the wells are drilled and completed as any inherent geological factors. The learning curve from first (often marginal) production to more consistent, economic development is a process measured in years. There are a number of reservoirs that were not discussed that, based on initial potentials, are showing promise. Wells tapping these reservoirs, which are classified as ‘Others’ in Figure 9 and are shown as black pluses in Figure 11, may develop into larger horizontal-drilling plays in the future. Significant Wells in <strong>2011</strong> The following is a list of what are believed to be among the most significant wells registered for <strong>Oklahoma</strong> in <strong>2011</strong>. Although all were registered in the past year, due to reporting delays, some have earlier completion dates. The wells listed were identified from a weekly review of the IHS Energy EnergyNews on Demand Midcontinent activity reports released online throughout the year. An initial list of 152 candidates compiled from this publication was distilled to a final total of 15. Such a list is subjective and may miss wells that could eventually become noteworthy. Due to confidentiality issues, wells that may be notable for technical reasons will probably be missed. For instance, those that confirm some new type of trapping style or proved the benefit of a new drilling or completion technique will be difficult to identify until information is disseminated years from now. Horizontal wells have occupied a progres-

sively larger share of the significant well listings each year. In 2010, and now <strong>2011</strong>, they comprise all of the ‘all-star’ wells in this report. Those listed here have either significantly expanded what appears to be economic production in an established horizontal play or in some way constrained its ultimate extent. To keep this listing to a manageable size, in some cases related nearby wells were added to the discussion. Wells with production histories are given precedence over those with only impressive initial potential tests and, where available, the volumes reported are given. Please refer to Figure 11 for orientation during the following discussion. 1) Sec. 13-3N-21ECM (Beaver County): In one of the State’s most active horizontal drilling plays QEP Energy extended Marmaton production two miles to the northwest with the completion of their Bobbitt Trust #3-13H well. As well as expanding the productive area, this well has also established a new highest initial potential with a daily rate of 1,063 BO per day. No gas, water, or stimulation was recorded for this well, which was completed in a 4,508’ lateral located at a true vertical depth (TVD) of 6,000’. 2) Sec. 6-1N-20ECM (Beaver County): In a related development, Unit Petroleum made a horizontal Marmaton completion in the State of <strong>Oklahoma</strong> #1-H that is 15 miles west of the main play. This well is located on the southern limit of a small pod of vertical Marmaton wells assigned to the Camrick District that were drilled in 1970 and 1971. Since that time the five wells in Section 6 have produced about 172 MBO. This new horizontal well had an initial potential on pump of 284 BO (38 O API) + 93 MCF + 1,740 BW per day from a 2,218’ lateral at a TVD of 5,890’. It was fracture stimulated with 650,000 pounds of sand. 3) Sec. 4-14N-24W (Roger Mills County): Classified for now as part of the same horizontal Marmaton play located to the north, operators drilled about two dozen wells in southern Ellis County and have now pushed production into central Roger Mills County. Although here it may have a southern provenance, making it a Marmaton ‘wash’, it is still simply identified as Marmaton. The Cordillera Energy Galileo #2-4HA had an initial potential of 367 BO + 5.36 MMCF per day with no water reported. The well has a 2,200’ lateral located at a TVD of 11,150’. Cordillera has reported that the NGL yield from the gas at this well is about 93 barrels per MMCF, giving it nearly 500 barrels of NGL production initially. This is comparable to the yield reported for Marmaton wells in Ellis County. The number of horizontal Marmaton wells nearly tripled in <strong>2011</strong> with Unit Petroleum and EOG Resources operating most of them. With a total of 86 completions registered thus far this play will undoubtedly become one of the ‘major’ horizontal plays in next year’s report. 4) Sec. 23-26N-24W (Harper County): In another horizontal play that will probably reach the 100-well hurdle and become ‘major’ in the next year or two, Cherokee completions also more than tripled in <strong>2011</strong>. The 45 completions in <strong>2011</strong> are mostly scattered in three areas in southern Roger Mills, southern Ellis, and western Harper Counties. Apache completed their Zoldoske #4-23H for 525 BO (45 O API) + 681 MCF + 117 BW per day. This well, which is the southernmost in the Harper County trend, shows that this play is far from defined. The well was completed in a 4,482’ lateral at a TVD of 6,750’ and acidfraced in ten stages with about 1.2 million pounds of sand. In six months this well produced about 31 MBO + 77 MMCF with a rate in the last complete month of 117 BO + 3.0 MMCF per day. 5) Sec. 17-11N-21W (Beckham County): In a major westward extension of liquidsrich Desmoinesian Granite Wash production, Apache drilled a pair of excellent wells from the same surface location. Both completed in June <strong>2011</strong>, the Smith 1-16H and 1-17H are virtual twins with initial potentials of 1,115 BC + 12,634 MCF + 596 BW and 1,095 BC + 12,582 MCF + 554 BW per day. Both wells have a TVD of about 13,000’ and 4,000’ laterals that were fracture stimulated with 3.1 to 3.3 million pounds of sand. The heart of the play remains in Washita County, but these wells are the first to establish high liquids production in Beckham County, which until now has been dominantly gas. The two wells have produced 564 and 574 MMCF in less than two months with a combined recovery of 34 MBC. In the last complete month each well was producing about 11.6 MMCF per day with a combined daily rate of 1,082 BC. Although Desmoinesian Granite Wash production extends westward into the Texas Panhandle, the eastern limit of this play seems to be anchored in the center of township 11N-16W. It is not known if this limit is geological or lease related, but high condensate-yield wells have been drilled by Chesapeake right up to this limit. 6) Sec. 14-11N-23W (Roger Mills County): Along the trend of the Desmoinesian, Hogshooter and other horizontal ‘Granite Wash’ plays operators have been drilling wells targeting what they are calling Missouri Granite Wash or Cottage Grove sand. The most notable of these wells was drilled by Crawley Petroleum. The Moore #5-14H had an initial potential of 1,485 BO + 5,717 MCF + 710 BW per day in a reservoir identified as the Cottage Grove sand. This well has a 5,260’ lateral at a TVD of 11,322’ that was fraced using about 2.4 million pounds of sand. 7) Sec. 11-16N-20W (Dewey County): Horizontal Tonkawa completions, which doubled in <strong>2011</strong>, have historically been situated in Roger Mills and southern Ellis Counties. <strong>2011</strong> saw a major westward development of the play into southwestern Dewey County. Chesapeake drilled what appears to be the best of the nine wells in this area with their Lauder #1-11H. Completed in a 4,260’ lateral at a TVD of 8,240’ the well had an initial potential on gas lift of 510 BO (46 O API) + 420 MCF + 1,260 BW per day after a fracture stimulation that used 4.2 million pounds of sand. In four months of production this well, apparently choked back, has cumulative March ~ April 2012 | Page 391