Productivity improvements and cost deflation have made tight oil production more economically viable in the key growth plays, according to a Wood Mackenzie report.
In July 2016, Wood Mackenzie projected key plays such as the Eagle Ford and Wolfcamp shales dominating the lower end of the cost curve, with the Wolfcamp averaging under $40 per barrel (bbl).
“Global breakeven costs have fallen by $19/bbl to the current weighted average of $51/bbl since the peak in 2014 and by $8/bbl over the past 12 months,” Patrick Gibson, research director at Wood Mackenzie, said in the report.
Out of U.S. shale plays, the highest breakeven oil price was in North Dakota’s Williston Basin and the lowest was in the Midland Basin, a KLR report said in October. For gas, Fayetteville play had the highest breakeven price and the Marcellus had the lowest.
Significant upside potential still remains for U.S. oil and gas operators to apply lower-cost unconventional drilling and completion technologies to boost production from tight conventional reservoirs, according to an IHS report in July 2016.
The average global recovery factor for a conventional oil reservoir is 34% and many tight conventional oil reservoirs have recovery factors of only 15% or less, IHS said.
Leveraging these technologies is attractive to operators because the overall breakeven costs to develop these projects are much lower and delivery infrastructure is already in place, said Steve Trammel, director of North America well and production content at IHS Markit Energy.
IHS based its assessment on nearly 46,000 U.S. horizontal wells completed between 2010 and 2015. The key plays identified include the Williston, Powder River, Denver-Julesburg, Permian, Anadarko basins and the Eagle Ford play fairways in Texas.
1. Cimarex Energy: 12/6/16
Denver-based Cimarex Energy Co. (NYSE: XEC) completed three offsetting horizontal Wolfcamp wells were completed in Culberson County, Texas (RRC Dist. 8), according to an IHS Markit report.
The Ford West Field ventures are on a 1,007-acre Delaware Basin lease in Section 34, Block 59, T2S, T&P RR Co Survey, A-5085.
The #2H Gato Del Sol 34 Unit flowed 1.992 million cubic feet (MMcf) of gas, 377 bbl of 47.6-degree-gravity oil and 2,104 bbl of water per day from fracture-stimulated perforations at 9,176 feet to 16,419 feet. Tested on a 32/64-inch choke, the flowing tubing pressure was 1,365 pounds per square inch (psi). The shut-in tubing pressure was 4,510 psi. The well was drilled to 16,468 feet, and the lateral bottomed about two miles to the south in Section 39 at a true vertical depth of 9,077 feet.
A parallel lateral at #3H Gato Del Sol 34 runs west of #2H and flowed 1.931 MMcf of gas, 777 bbl of 46.6-degree-gravity oil and 2,616 bbl of water per day from fractured perforations at 8,980 feet to 16,155 feet. It was drilled to 16,206 feet, 8,936-foot true vertical and tested on a 34/64-inch choke with a flowing tubing pressure of 1,151 psi and a shut-in tubing pressure of 4,427 psi.
About one-quarter mile to the east of #2H and #3H, the south-trending #1H Gato Del Sol 34 Unit flowed 3.4 MMcf of gas and 700 bbl of condensate per day from perforations at 9,298 feet to 16,135 feet. Drilled out of an 8,680-foot pilot hole, the well was drilled to 16,255 feet and bottomed about one mile to the south at 8,965-foot true vertical.
2. Apache Corp.: 12/8/16
Apache Corp. (NYSE: APA) plans to drill more wells at its Alpine High Play in the Delaware Basin portion of Reeves County, Texas (RRC Dist. 8).
The #1H and 3H Alta will be drilled to 16,000 feet from offsetting surface locations in Section 40, Block 13, H&GN RR Co Survey, A-4574, according to IHS Markit. In adjacent Section 35, the #1 Grindelwald will be directionally drilled and plugged. To the southeast will be the #3H and #5H Weissmies.
Houston-based Apache has also filed permits for #1H, #2H, #3H and #5H Cherokee State in Section 16, Block 57, T7S, T&P Survey, A-2699.
All four horizontal tests will bottom to the north at proposed total depths of 16,000 feet. The offsetting surface locations are about 2.5 miles west of the recently completed #1H Mont Blanc, which flowed 17.068 MMcf of gas and 24 bbl of oil per day from Woodford.
3. Callon Petroleum: 12/13/16
A subsidiary of Callon Petroleum Co. (NYSE: CPE) completed a Wolfcamp discovery in Howard County, Texas (RRC Dist. 8).
The well was horizontally drilled to 16,538 feet and is on a 479.5-acre Midland Basin lease in Section 31, Block 33, T3N, T&P RR Co Survey, A-349.
The #1H A Silver City Unit pumped 2.241 Mbbl of 38.1-degree-gravity oil, 1.309 MMcf of gas and 1,577 bbl of water per day. Production is from a fracture-treated zone at 9,067 feet to 16,430 feet. The lateral bottomed about two miles to the northwest in Section 19.
Additional information is not available from the Natchez, Miss.-based operator.
4. Pendragon Oil: 9/28/16
Two Barnett Shale oil wells were completed by Fort Worth, Texas-based Pendragon Oil Co. in Stephens County, Texas (RRC Dist. 7B).
The Newark East Field discoveries are on a 160-acre Bend Arch lease in Section 70, BAL Survey, A-2619.
The #1A Judkins pumped 50 bbl of 41-degree-gravity oil, 111 Mcf of gas and 629 bbl of water per day from acid- and fracture-stimulated perforations at 4,080 feet to 93 feet. The well was drilled to 4,395 feet and plugged back to 4,180 feet. The original hole was abandoned following unsuccessful production tests at 4,262 feet to 98 feet.
The #1 Van Winkle was tested on-pump flowing 45 bbl of 41-degree-gravity oil, 90 Mcf of gas and 678 bbl of water per day. It was drilled to 4,310 feet and production is from acid- and fractured perforations at 4,032 feet to 50 feet.
Eagle Ford Shale
5. Marathon Oil: 9/28/16
Four Eagle Ford Shale discoveries in Live Oak County, Texas (RRC Dist. 2), were announced by Houston-based Marathon Oil Co. (NYSE: MRO).
The horizontal wells were drilled in the Eagleville Field, offsetting surface locations on a 164-acre lease in Section 5, John Houlighan Survey, A-17, and bottomed about a mile to the southeast:
- The #1H Guajillo Unit 12 South is producing 1,105 bbl of 45.6-degree-gravity crude, 1.037 MMcf of gas and 613 bbl of water per day through fracture-treated perforations at 11,558 feet to 16,062 feet. Tested on a 16/64-inch choke, the flowing tubing pressure was 3,440 psi. It was drilled to 16,190 feet, 11,392-foot true vertical.
- The #2H Guajillo Unit 12 South is flowing 1.364 Mbbl of crude, 1.211 MMcf of gas and 472 bbl of water per day from perforations at 11,560 feet to 16,127 feet.
- The #3H Guajillo Unit 12 South is flowing 1,455 bbl of crude, 1.294 MMcf of gas and 485 bbl of water per day from perforations at 11,535 feet to 16,197 feet.
- The #4H Guajillo Unit 12 South is producing 1,639 bbl of crude per day from perforations at 11,680 feet to 16,338 feet.
6. EOG Resources: 1/13/17
EOG Resources Inc. (NYSE: EOG), based in Houston, completed three Eagle Ford Shale wells from a common pad in Jean Humphrey survey, A-266 in the Gonzales, Texas County (RRC Dist. 1), portion of Eagleville Field, according to IHS Markit.
The #2H Russell Unit flowed 4,263 bbl of 46-degree-gravity crude, 4.272 MMcf of gas and 573 bbl of water per day from fracture-stimulated perforations at 12,053 feet to 17,116 feet. Tested on a 30/64-inch choke, the flowing tubing pressure was 3,097 psi. It was drilled to the southeast to 17,216 feet, 12,194-foot true vertical, and bottomed in Isaac Baker Survey, A-89.
The #9H Dio Unit was drilled to the southeast to 14,951 feet, 12,015-foot true vertical, and bottomed in Francisco Gonzales Survey A-194 in DeWitt County, Texas. It produced 3,664 bbl of oil, 3.088 MMcf of gas and 1,432 bbl of water per day. Production is from 12,055 feet to 14,860 feet. Gauged on a 34/64-inch choke, the flowing tubing pressure was 2,382 psi.
The #10H Dio Unit was tested flowing 3,305 bbl of crude, 2.830 MMcf of gas and 1,385 bbl of water from 11,959 feet to 17,035 feet. It bottomed to the southeast at 17,121 feet, 17,040-foot true vertical. The flowing tubing pressure was 2,499 psi when tested on a 36/64-inch choke.
7. Lonestar Resources: 11/29/16
Lonestar Resources Inc. (NASDAQ: LONE) drilled and completed two Eagle Ford wells in Gonzales (RRC Dist. 1), at its Harvey Johnson Project.
The Eagleville Field wells, #9H Cyclone and #10H Cyclone, are in Section 1, Lockhart Survey. Both wells were drilled to 9,077 feet, 9,008-foot true vertical.
The #9H Cyclone flowed 598 barrels of oil equivalent per day (boe/d), with 91% oil. The #10H Cyclone was tested producing 631 boe/d, also with 91% oil.
Additional completion information is not available. The Fort Worth, Texas-based company holds 2,906 acres and the lease can accommodate 29 more laterals averaging 7,000 feet.
Larry Prado, activity editor, can be reached at firstname.lastname@example.org.