Laredo Petroleum Inc. chairman and chief executive officer Randy Foutch says the Cline shale “is a world-class shale based on what we know today.” And, what it knows about this oily rock is a great deal: In its Permian Basin acreage, starting in 2008, Laredo has drilled more than 500 vertical wells from the top of the Spraberry to the Atoka, which includes the Wolfcamp and Cline formations.
Foutch addressed some of the more than 1,700 registered E&P operators, financiers, sellside analysts, and buyside analysts and fund managers attending the IPAA’s OGIS New York meeting this week. Laredo started the Cline play in 2009, Foutch says, when it cored it early on. It has 13 vertical tests of the Cline and it has 143 whole or sidewall cores of the rock. According to its whole-core information, the Cline’s TOC or total organic content is 2.0 to 7.5.
“The Cline is less known (but) we know a lot about it,” Foutch says. Across at least 80 miles in the Midland Basin, the formation is fairly unchanging north to south, he adds. Laredo has at least 1,300 Wolfcamp locations to drill in its leasehold and more than 900 potential horizontal Cline locations.
In Foutch’s comparisons of Midland Basin formations, he shows the Cline as being Pennsylvanian in age, sitting just beneath the Wolfcamp, which is Permian in age.
Scott Sheffield, Pioneer Natural Resources Co. chairman and CEO, says the Cline is the lowest member of the Wolfcamp—that is, the “D” bench. OGIS attendees, however, say they’re hearing mixed commentary about whether the Cline is part of the Permian Wolfcamp or part of the Pennsylvanian. One attendee, an E&P operator, quipped it might eventually be called the “PermiPenn” or the “WolfCline” and, thus, further contribute to the myriad—often confusing—nomenclature in the Permian Basin.
Other OGIS presenters citing Cline exposure include:
--Legacy Reserves LP, which estimates completed, horizontal Cline well costs of some $8 million. It has some 100,000 gross acres over Cline with 5% working interest.
--Energen Resources Corp., which shows the Cline as a shale formation distinct from the limestone and shaley siltstones of the Wolfcamp.
--Devon Energy Corp., which has put together 500,000 net acres over Cline and plans 15 wells in 2012.
--And, Concho Resources Inc., whose chairman and CEO Tim Leach agrees with Laredo’s Foutch that Cline is “a localized name” for one of the Pennsylvanian shales.
‘We are in the very early innings, but it is exciting because the results that are coming back are very good,” VP Christmann says.
The play’s consistent formation characteristics make stacked lateral operations and pad drilling ideal, says Approach Resources’ Craft.