 Looking for black gold, deep in the heart of Texas: A vibroseis crew prepares to acquire data in eastern Wise County, one of several Texas counties where Barnett production is plentiful. Two producing Barnett wells can be seen in the background.
Photo courtesy of Jon Huggins
Production
just keeps going gangbusters in the Barnett shale play in the Fort
Worth Basin in north-central Texas.
In fact,
the buzz in the oil patch likens the play's huge production volumes
to printing money in the field.
The current
frenetic leasing and drilling activity is a world removed from the
early 1980s when Mitchell Energy -- intrigued by widespread gas
shows and a trickle of unexpected production while drilling other
targets -- kicked off the initial effort to unlock the secrets of
the Barnett and determine its potential.
Close to
two decades elapsed before the play proved to be solidly economical
for Mitchell, prompting many of today's veteran players to dub it
the "17-year overnight sensation."
The current
undisputed kingpin of the Barnett is Devon Energy, which snapped
up Mitchell Energy in 2001, laying claim to Mitchell's already-substantial
holdings in the shale.
"There
are more than 100 companies and a lot more individuals currently
active," said Patrick J.F. Gratton, independent geologist and AAPG
president, "and there are well more than 60 operators."
Gratton,
who has been an active participant in the play for several years,
is on the lecture circuit with his presentation "Barnett Shale Play:
Big and Getting Bigger," which has drawn audiences at numerous domestic
geological society gatherings as well as the University of Scotland
at Aberdeen.
Not surprisingly,
there's no dearth of folks wanting to gain entry into this unconventional
shale gas bonanza.
AAPG member
Kent Bowker, consulting geologist and a seasoned Barnett player
and alumnus of Mitchell Energy, agrees with Gratton's assessment
and says "the number grows daily."
"I get
at least two calls each week from people wanting to meet with me
to talk about getting into the Barnett," Bowker said. "Both small
and mid-size independents are interested, and even the majors are
starting to look now.
"It's like
a shale revolution going on -- everyone's gotta have some."
It's easy
to understand why when you look at the numbers he ticked off:
-
More than one Tcf already produced.
- Field
producing more than one Bcf/day and growing.
- Well
completions at a rate of 1.5/day.
- Likely
several Tcf of booked reserves.
The Barnett,
in fact, kicks out more than one-half of the total shale gas produced
in the United States, Gratton noted.
"All other
Texas gas fields are either flat or declining," Bowker said, "but
the Barnett shale is like a perpetual motion machine -- and there's
no prospect of the end."
Get Ready
...
The heart
of the play is the Newark East Field with more than 2,340 wells
producing from the Barnett at depths as shallow as 6,500 feet. The
consensus among many of the veteran players is the field could ultimately
surpass the giant Hugoton Field to become the largest gas field
in the United States.
The core
area of the Newark East lies in southeast Wise, southwest Denton
and north-central Tarrant counties. Production continues to expand
geographically, however, with the best well in the field currently
to the south in Johnson County.
"Best well" is a record that usually falls every two months as operators refine
their completion techniques, Bowker noted.
"At Mitchell,
we did some estimates of the extent of the gas-prone area of the
Barnett (some areas of the shale are still oily), and I've done
a couple since then," said Mitchell alum and consulting geologist
Dan Steward, who works with Republic Energy, one of the play's earliest
operators. "I believe the gas-prone area occupies between 6,000
and 7,000 square miles, which includes areas underneath the Ouachita
overthrust."
Before
you rush out the door to stake a claim in this amazing play, gather
up a bushel basket of money. Also, be aware there are reasons why
the Barnett caused years of frustration and sleepless nights for
the pioneering Mitchell crew before they turned it into the next
big thing.
There's
a host of complex geological and engineering issues standing between
the operator and first production.
For starters,
shale is not supposed to be a reservoir rock, according to Bowker.
"It's astounding
the most prolific reservoir rock in Texas is a shale," he noted.
"You know it's working, but you look at the rock and it just doesn't
make any sense how all that gas is coming out of that rock that's
tight as a tabletop.
"It sounds
like a gas factory," Bowker noted. "But there are geologic reasons
why some parts of the basin are more prospective than others, and
there's science and engineering behind all this -- you don't just
drill a hole like Jed Clampett and have gas come out of the ground.
"Prices
are up and everyone hears great things about the Barnett," he continued.
"They don't understand it took a long time to figure out, and we're
still trying to figure it out -- and not all are making money while
they're doing it. At least 20 companies have drilled dry holes because
they don't understand it.
"We're
still writing the book on shale."
Get Set
...
If you're
still determined to get in on the action, it's fairly easy to establish
a presence -- if you're willing to pay the price.
Late last
year, a lease sale in a part of the play's core area in northern
Tarrant County, where the federal government holds mineral rights
from a former Air Force base, captured a fee of $10,200 per acre,
Bowker said.
If this
makes you feel faint, go shopping in Bosque County to the south
of the big action, where prices recently were in the $300 per acre
range -- still up considerably from a couple of years ago when owners
couldn't give leases away, according to Steward.
"There's
essentially been no drilling yet," Steward said, "but the Barnett
is gas-prone here with a thickness of 150 to 200 feet. People are
taking leases with the idea the technology will catch up."
"People
are also taking leases in areas where I question it will work,"
Bowker said. "But I don't say no, because there are very few places
where I would guarantee the Barnett shale won't work."
Where it
doesn't work, there can still be an upside in some instances, according
to Gratton.
"In the
westerly part of the play such as Parker County, there are shallower
Pennsylvanian objectives -- fluvial deltaic sandstones, which come
and go and are hard to predict -- which frequently are bail-out
zones," Gratton said. "From an investor standpoint, if you're in
one of the treacherous areas of the Barnett where it's difficult
to make good completions, these overlying zones take away a lot
of the financial risk.
"This adds
a plus to where the play gets shallower and weaker to the southwest
of the core area."
Fracture
treatments and their containment within the formation have always
been key to producing this tight low-permeability shale.
"In some
places, if you don't have a relatively accommodating limestone bounding
the Barnett to stop the artificial fracture from going on, then
the fractures will continue in a way to lead you into a water-bearing
formation or aquifer," Gratton said. "This has been a big problem."
The original
gel fracs were highly expensive and a major drag on the economics
of the play, even though Mitchell had extensive existing infrastructure
in the area for its shallower production. In the late 1990s engineers
began experimenting with water fracs, which proved to be comparable
to gel fracs in performance while lowering stimulation costs dramatically.
Horizontal
drilling provided another leap forward for the Barnett.
"You get
much more efficient fracture stimulation with horizontals than with
verticals," Bowker noted. "The hydraulics are more efficient in
contacting more of the reservoir rock, and the more reservoir rock
you can contact with the well and with the fracture stimulation,
the better the well.
"You can
get about three times the well for two times the cost of a vertical,"
he said, "maybe better."
Whoa! Uh
... Go!
A note
of caution to newcomers: "A year-and-a-half ago, we saw a lot of
unknowns, or mom 'n' pops, picking up acreage and drilling vertical
wells," Steward said. "They basically found the probability of success
was not high enough with vertical wells."
Steward
and many of his peers predict major longevity for the Barnett.
"It's going
to be producing for more than a hundred years, maybe several hundred,"
he predicted. "Technology will let us do a lot of things, and I
have no idea what that technology will be.
"No one
recognized way back that water frac technology would cause the Barnett
to take off," Steward said, "and then horizontal drilling kicked
it into another high gear. Some other technology will surpass that.
"The majority
of the gas we're getting out is free gas," he added, "and until
we start doing things to enhance the ability to get all the sorbed
gas out, there's a tremendous amount of gas still down there locked
up."
Steward
anticipates one breakthrough will be the use of dual gathering systems,
i.e., a low pressure system parallel to a high pressure one. The
state of the well determines which gathering system it enters. For
example, it's common to re-frac a well and get back into a high
pressure regime, meaning the well must be switched to a corresponding
gathering system.
Like so
many oil and gas plays, the importance of 3-D seismic is not to
be underestimated in the Barnett.
"Most companies
who know what they're doing would not drill a well without a 3-D
survey over it if they're smart," Bowker said. "It's not necessarily
to tell where to drill but where not to drill. There are geologic
hazards that can be imaged through seismic geophysics."
Jon Huggins,
consulting geophysicist and another Mitchell alum, concurs.
"The purpose
is to locate such things as faults and karst collapse features,
and there are some large regional faults to be aware of, too," Huggins
said. "History has shown when you get close to faults, you start
having problems with fracs, or get underlying Ellenburger water,
or any number of bad things happen to you."
It's particularly
noteworthy that without geologist and now-legendary oilman George
Mitchell's boundless optimism and undying belief early on in the
unproven, perplexing Barnett shale the play likely would have never
happened.
"We would
not be talking about the Barnett shale if not for George Mitchell,"
Bowker said. "No other manager or owner of an independent or major
company would have let his people work on something so marginally
-- and sometimes sub-economic. He put his money into a play for
17 years that was barely economic, never backing down even when
his managers said they didn't believe it.
"He's a
wildcatter, and he knew there was something there," Bowker continued.
"He knew the potential without really knowing why, and he kept pushing
his people until they figured it out.
"This field
is making billions of dollars for lots of people; they should erect
a statue of George Mitchell and pay homage to it every day."
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> Barnett Shale Play
The 17-Year
Overnight Sensation
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