High Prices Spur New Wave Of Exploration For Oil Reserves

With $100 oil and things looking like the price will stay there, people are “getting after it”–as well as going after unconventional gas resource plays. This column highlights positive activity in several geographic areas. PTTC’s goal in taking this tack is to encourage readers to find the technology fit for their resources/areas and “just go for it.”

PTTC’s Michigan group, working with several co-sponsors, held a workshop focusing on the Trenton-Black River. Proving both that large volumes of “black gold” (as Jed Clampett would say) remain, and that people are working to produce it, attendance exceeded 170 people. Muskegon Development Co. shared its experience in the Williams Field Berea Sandstone waterflood. Although very mature (primary production peaked in 1986), Muskegon converted seven of 23 wells to injection in 2002, and was able to achieve a peak secondary production rate greater than peak primary production, producing 1.2 million barrels of oil in secondary recovery.

Northshore Petroleum LLC shared the results from a high-rate, high-volume fracturing program in the Sterling Field. Production there is decades old from several zones. Northshore drilled three wells in 2007, utilizing multiple sets of limited-entry perforations that then were fracture stimulated with high-injection rate slick water fracs. Initial production rates of more than 100 barrels of oil a day have settled since to between 2040 bbl/d oil.

Warren Bauman, an independent consultant, shared how to use field data to locate behind-pipe reserves in abandoned fields. Other speakers talked about basement faulting, its effects, and hydrothermal dolomitization, all of which are important concepts
in the Michigan Basin. And one must not forget 3-D seismic. Michigan explorationists know well that success in reef and fractured dolomite plays is a matter of a few feet. That is where seismic has contributed so much in the past 15 years.

The “Bakken buzz” grows ever stronger, accelerated by success and a new U.S. Geological Survey assessment of the Bakken’s undiscovered oil resources. Using a geology-based assessment methodology, USGS estimates mean undiscovered volumes of 3.65 billion barrels of oil and 1.85 trillion cubic feet of gas. The USGS fact sheet describing study results is available at http://pubs.usgs.gov/fs/2008/3021/pdf/FS08-3021_508.pdf. Dividing the oil window into five areas, the largest volumes were seen in three areas, two of which have had limited drilling. Despite uncertainties, it is obvious that there is lots of oil to go after–and operators are doing just that.

A “required” feature of any technology-focused column these days is something about gas shale plays. Beyond saying “watch the Marcellus,” there are good things happening in the Woodford Shale. One of the primary operators, Newfield Exploration Co., shared its success with longer laterals in the April l7, 2008, issue of Oil & Gas Journal. By mid-March, Newfield had drilled 14 laterals longer than 3,000 feet. Drilling and completion costs for the last 10 laterals averaged $7 million, while the estimated ultimate recovery for each was at least 4.5 billion cubic feet. Newfield anticipates gas recovery factors greater than 50 percent because of the high total organic carbon and silica contents, which is advantageous for hydraulic fracturing. Seismic information enables Newfield to define wells, identify locations for extended laterals, and reduce costs. Lateral length is predominantly controlled by geology and faulting. Fracture optimization, pad drilling, simultaneous fracturing, well spacing pilots, and multilaterals are part of Newfield’s technology evolution.

Offshore California, Plains Exploration and Production Co. has negotiated an “unconventional” deal with environmental foes. In exchange for letting the company drill, PXP agreed to discontinue offshore production long before it otherwise would, according to a report in the Los Angeles Times. PXP has agreed to shut its platforms in the Santa Barbara Channel by a certain date (2022 for the last one). This allows PXP to go after potentially 200 million barrels of reserves in Tranquillon Ridge, using laterals as long as five miles from existing Platform Irene. The agreement must still win approval from county, state and federal officials.

So it is apparent that technology is having an impact everywhere. That technology comes through focused research and development, and operators who are willing to work through the learning curve. Project awards in the Research Partnership to Secure Energy for America’s “unconventional resources” program (www.rpsea.org/en/art/?68) reveal the thrust of public domain R&D for unconventional oil and gas. PTTC looks forward to being part of the network that helps communicate technology developments.

RPSEA also manages a deepwater offshore R&D program. Those interested in playing the deep water may be interested in the American Association of Petroleum Geologists’ Atlas of Deepwater Outcrops, available through AAPG’s online bookstore. This atlas assembles the first collection of quantitative architectural data on deepwater outcrops geared for easy use in reservoir characterization and modeling.