Testing continues on US shale oils

Paul Boughton

The US Eagle Ford and Marcellus shales continue to attract inward investment as sales revenues begin to flow. Eugene McCarthy reports.

In the US, work continues apace on the Eagle Ford and Marcellus shales.

For example, Penn Virginia currently has six producing Eagle Ford shale wells. The six, in which the company has an 83 per cent working interest, are currently producing an aggregate of 4096 bbl/d of oil and 2072 ft3/d of natural gas on a gross basis. The natural gas associated with these wells is expected to yield approximately 150 bbl of natural gas liquids (NGL) per million ft3 (MMcf).  

The company has also extended its agreement with a private service contractor to provide hydraulic fracturing services primarily in the Eagle Ford shale, as well as other plays in east Texas and Oklahoma.

In another development, Penn’s natural gas midstream provider in Gonzales County recently connected the company’s wells to its pipeline and processing facilities. “As a result we have begun to recognise sales revenue associated with NGL and residue gas production,” says a company statement.

In terms of Marcellus shale activity, the company continues to test its 35 000 acre position in Potter and Tioga Counties and has drilled four horizontal wells. Three of these are completed and being tested. The company also plans to move a drilling rig to test the eastern portion of its acreage during the second half of the year. In addition, pipeline construction is in progress, with sales expected to begin by early August.

Carrizo oil and gas, the Houston-based energy company with major interests in the Eagle Ford shale in South Texas and the Marcellus shale in Appalachia, has also issued an update on its current activities.

The company has recently entered into firm agreements to acquire over 13 000 net acres of Eagle Ford Shale mineral interests, bringing its total net Eagle Ford land position to approximately 33 000 acres.

These newly-acquired acres are located in the condensate trend in La Salle County, Texas. The up-front cash cost associated with these acquisitions is approximately US$1650 per acre. The remainder of the lease acquisition costs will be in the form of a drilling carry that will fund certain of its partners' share of development costs, where applicable, in the acreage and will be dependent on the timing and density of development drilling on the properties.

In order to further accelerate its Eagle Ford Shale activity, the company’s remaining Barnett Shale rig has been relocated to South Texas and is now on location drilling the Ivey Ranch 10H in Dimmit County. Current plans call for this rig to remain in the Eagle Ford until it is replaced by a new purpose-built rig currently scheduled for arrival in December 2011, at which time the H&P #332 rig will return to its drilling schedule in the Barnett. Given the current backlog of wells waiting on completion in the Barnett Shale, the company believes this rig move should have no impact on estimated 2011 Barnett production.

The company's newest rig, a purpose-built H&P Flex 3S, just arrived in the Eagle Ford and is drilling on its recently acquired RPG project in north western McMullen County. The company currently has three rigs drilling on its Eagle Ford properties. Although Carrizo expects the number of Eagle Ford wells drilled during 2011 to increase above projections due to this rig relocation, uncertainty associated with the timing of well completions and initiation of oil sales precludes the company from increasing its previous guidance for 2011 oil production until a frac schedule is finalised. The three wells waiting on completion located on the Mumme lease in LaSalle County are scheduled for fracture stimulation shortly.

In the Marcellus shale, Carrizo now has eight gross wells drilled waiting on completion in Susquehanna and Wyoming Counties. Stimulation and completion of the back-log of drilled wells is scheduled to begin in July, while first gas sales from Susquehanna County are expected to begin in August following completion of the Laser pipeline.

Cabot Oil & Gas has announced its intention to complete one well per week through to the end of the year in its Marcellus operation. This effort was successful although weather at year-end and a stream-crossing delay slowed several wells from being turned in line. During this period ten wells were completed with five wells flowing to sales and five wells waiting on pipeline.

"These five wells, which were turned in line, had an average 30-day production rate of 6 Mmcf per day," stated Dan O Dinges, chairman, president and ceo. "Included in this population was the company’s first horizontal Purcell limestone test that had a 30-day production rate of 7.3 Mmcf per day. The Purcell is located between the upper and lower Marcellus under our acreage position in Susquehanna County."

Dinges added, "This success potentially opens up additional locations and prospectivity."

In total for 2009, the company drilled 30 horizontal wells with 14 being completed and turned in line. The average initial production (IP) rate for these wells was 7.5 Mmcf per day with an average 30-day production rate of 6.9 Mmcf per day. "Because of the production history and the consistency of results, we are now estimating ultimate reserves of 5.5b ft3 per well, up from our original disclosure of 4.5b ft3 per well," commented Dinges.

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Conventional, too

Statoil, along with partners Eni Norway and Petoro, has made a significant oil discovery on the Skrugard prospect in the Barents Sea. According to the company, the breakthrough discovery is one of the most important finds on the Norwegian continental shelf in the last decade.

Statoil and its partners are in the process of concluding drilling operations on the Skrugard prospect, which is located approximately 100 km north of the Snøhvit gas field in the Barents Sea.

The well was drilled with the Polar Pioneer rig (Fig. 1), and has proven gas column of 33 metres and an oil column of 90 metres. The oil is anticipated to be easily producible.

The estimated volume of the discovery is between 150–250 million recoverable barrels of oil equivalent (boe), while Statoil sees opportunities for further upside in the license of up to 250 million barrels – for a potential total of 500 million boe.

Statoil has also signed a heads of agreement (HoA) with KazMunayGas on the Abay block in the Kazakhstan sector of the Caspian Sea. Under the HoA, the parties plan to conduct evaluation of the hydrocarbon potential of the Abay block in the Northern Caspian Sea. Statoil and KazMunayGas will jointly establish a company that will serve as operator of the project. The exploration work programme will cover seismic surveys, data acquisition and the drilling of one exploration well.

As a result of the 2010 shallow water bid round in Trinidad and Tobago, RWE Dea has been awarded one of the country’s offshore blocks. The respective production sharing contract has now been signed with the government of Trinidad and Tobago in Port of Spain. For RWE Dea, this marks the entry into the country with its established natural gas infrastructure in a prolific oil and gas prone region.

The NCMA2 block is situated approximately 50 km off the northern coast of Trinidad. The block covers 1,019 km² and is located in water depths of 100-200m. It is on trend with the Hibiscus and Chaconia gas fields. Operational work is planned to commence in July with the acquisition of a 3D seismic survey covering the whole concession. RWE Dea's share in block NCMA2 is 24 per cent with Niko Resources as operator holding 56 per cent and state company Petrotrin the remaining 20 per cent.

Finally, TAG Oil has reported that the Sidewinder-3 exploration well is confirmed as a light oil and gas discovery, the third discovery made in TAG Oil's 100 per cent-controlled Petroleum Exploration Permit 38748 in the onshore Taranaki Basin, North Island, New Zealand, and the company's fourth new oil and gas discovery in five months.

Fracturing and stimulation vessel

Text: Baker Hughes has launched its state-of-the-art fracturing and stimulation vessel, the Blue Tarpon. The 300-foot ship, one of the world’s largest stimulation vessels and the seventh vessel in the Baker Hughes fleet, is designed to provide high-rate and high-volume stimulation treatments for demanding offshore operations.

With one of the largest proppant and fluid-carrying capacities in the world, the ABS class-certified ship can perform complex, multiple-zone completions without travelling back to port for resupply.

“The Blue Tarpon is designed to provide operators with redundancy on all key elements of the stimulation plant,” says Derek Mathieson, president of products and technology for Baker Hughes. “Enhanced safety systems, as well as redundant back-up blending and pumping capabilities, have been installed to reduce the risks associated with performing multizone, high-rate, high-pressure completions. The ship also was designed with a focus on reliability and efficiency, allowing operators to minimise delays and associated operating expenses in high-cost offshore environments,” he notes.

With a maximum pump rate of 80bbl/min, proppant capacity of 2.1 million pounds, and accommodation for up to 44 people, the vessel is designed to perform round-the-clock operations in deepwater plays. Its ten separate high-pressure pump units — housed in a fully enclosed structure to protect the equipment from the environment — can deliver up to 24 000 hydraulic horsepower and pump up to 32 000 pounds of proppant per minute. The Blue Tarpon also features a DP-2 dynamic positioning system with twin bow thrusters and a stern thruster specifically designed to operate safely in the widest possible weather and sea conditions.

Fig. 1.The Polar Pioneer is key to one of the most important finds on the Norwegian continental shelf in the last decade. Image courtesy of Harald Petersen/Statoil.

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