BB - some good NG drilling news from today's Houston Chron.
"Dec. 28, 1999, 7:36PM
Freestone County economy gets boost
Success in the Sands
Bossier formation natural gas pay dirt
By MICHAEL DAVIS
Copyright 1999 Houston Chronicle
Just south of Fairfield, at a site about midway between Houston and Dallas, gas wells are being drilled and completed so rapidly that gravel companies have run low on supplies to make roads into drilling sites.
The area, which sits over a formation known as the Bossier Sands, has become one of the hottest natural gas plays in the state.
Houston companies Anadarko Petroleum Corp., Marathon Oil Co. and El Paso Energy all are drilling wells between 12,000 and 14,000 feet down.
The wells are relatively cheap to drill -- about $1 million each -- and are completed quickly, usually in about 40 days.
Typically, the wells come in at a very high flow rate and then production declines to about 3 million cubic feet of gas per day. Two weeks ago, Anadarko completed a well there that tested at 26 million cubic feet of gas per day, the highest flow rate of any well it has drilled into the Bossier Sands.
Anadarko is the most active company in the area with 18 rigs running full time, triple the number it had working the area just a year ago. So far, the company has drilled 120 wells and hit only one dry hole. The Houston independent oil company is spending about $500,000 per day on Bossier Sands wells.
The company has 60,000 acres leased in Freestone County and expects to spend about $300 million on wells plus infrastrucure such as pipelines in the area over the next two years. Estimates now are that Anadarko will drill another 200 to 220 wells into the Bossier Sands over the next 24 months.
The 18 rigs Anadarko has drilling into the Bossier Sands are more than half of the 27 rigs it has working onshore in North America. Anadarko is the second-most-active oil and gas company onshore in North America; Coastal is first, with 30 rigs working full time in the United States and Canada.
"We don't know the limits of this play," said Bob Allison, Anadarko chief executive. "We've grown our production there from nothing to 150 million cubic feet of gas per day."
"The more we drill, the better it gets," he added. "We think that this is at least a trillion-cubic-feet gas field."
Anadarko estimates its production from the Bossier Sands in 2000 will exceed expected gas production from its Hugoton Field in southwest Kansas, historically Anadarko's most prolific gas-producing property in the United States.
"This will give Anadarko some good domestic volume growth," said Stephen Smith, energy analyst with Dain Rauscher Wessels in Houston. The company's production in the field is accelerating so rapidly that it already has exceeded his projection that the Bossier Sands would be producing about 140 million cubic feet of gas per day in 2000.
Wells are being drilled into the Bossier Sands so rapidly that supplies of gravel to make roads to rigs have at times run low. The frenetic drilling and related construction have put about 700 people to work in Freestone County, Allison said.
Larry Williams, sales manager for Hanson Aggregates in Mexia, a company that sells crushed limestone for roads, said the drilling activity and some state jobs have caused periodic shortages of crushed limestone for roads but that the company has plenty of supplies now.
"Everybody ran short -- it's not that uncommon," Williams said. "They (oil companies) won't have any problems with supplies in 2000."
Before Anadarko and others started drilling in the area, most of the acreage was leased for drilling into another well-known formation, the Cotton Valley Pinnacle Reef. That formation is deeper than the Bossier Sands and successful wells typically are more prolific. They also are more difficult to complete successfully.
El Paso Production Co., formerly the oil and gas exploration arm of Sonat, had acreage in the area leased to drill into the Cotton Valley Pinnacle Reef, but has since shifted to drilling into the Bossier Sands, said Jack Holmes, president of the company.
"We watched Anadarko drill right up to our lease line," Holmes said. "We've drilled three successful wells in the last year and a half and we are very satisfied with the results."
El Paso is a partner in nine wells with Anadarko and plans to drill five wells in the Bossier Sands next year, Holmes said. As is the case with Anadarko, El Paso sees the Bossier Sands play as pretty close to a sure thing.
"The exploration risk has been largely reduced on most of the wells drilled out there," Holmes said.
Marathon Oil also is an example of a company that was drilling into the Cotton Valley Pinnacle Reef and is now targeting the Bossier Sands. The company drilled a successful well in partnership with Tom Brown Inc. of Midland in the area that recently tested at 4.9 million cubic feet of gas per day, said Susan Landreneau, spokeswoman for Marathon Oil in Houston."
Note CGP has 30 rigs working - long CGP
Regards,
ldo79 |
