The highly publicized Haynesville shale gas play, which is concentrated principally in northwest Louisiana, may soon be overshadowed by a whole new unconventional play.
This one’s the hydrocarbon flavor du jour – oil.
It’s the Brown Dense lime, which is the lower section of the Upper Jurassic Smackover formation, a thick carbonate that immediately underlies the Haynesville in the region. Geographically, the fledgling play is concentrated in southern Arkansas, parts of northern Louisiana and the river counties in extreme west-central Mississippi and extreme eastern Louisiana.
The Smackover formation per se has been drilled extensively since oil was first discovered in a test well drilled in the shallow Smackover Field in Union County, Arkansas, in 1937. It rapidly became the darling of Gulf Coast operators, and over the years numerous wells have successfully completed in the higher sections of the formation, in both carbonate and sandstone facies.
In most areas, the Lower Smackover lacks the reservoir qualities to produce commercially via conventional technologies, according to AAPG member Steve Walkinshaw, president of Madison, Miss.-based Vision Exploration LLC.
It may be a tough nut to crack production-wise, but it’s loaded with hydrocarbons.
“The lower unit of the Smackover is aptly named the Brown Dense,” Walkinshaw said, “and it’s the most prolific source rock in the Gulf Coast.”
AAPG member Randy Ponder, vice president of New Ventures at Southwestern Energy Company in Houston concurs.
“The organic-rich Brown Dense zone extends from Mexico to the Florida panhandle and on to offshore Florida, extending into the offshore of the Gulf of Mexico basin, where it’s the source rock for some of the fields on the GOM shelf as well as many of the deepwater fields,” Ponder said.
“It truly is the most prolific source rock in the Gulf Coast.”
In essence, limestone is a bit of a misnomer for the zone.
“In most areas, it’s an organic-rich mudstone, a very muddy carbonate,” Walkinshaw said. “The brittle micritic limestone is remarkably uniform, with only rare developments of significant porosity.
“In many areas it’s fractured,” he added, “and wells drilled there typically encounter a lot of good oil and gas shows.”
The Brown Dense has fed significant volumes of hydrocarbons to other reservoirs, but it has never been exploited with horizontal drilling technology – until now.
That’s changing somewhat quickly, as some laterals already have been drilled into it by a handful of smaller companies. However, a completion indicative of commercial potential has remained elusive.
Enter Southwestern, which is poised to determine if this can be realized.
The company has accumulated 460,000 net acres prospective for oil in the Brown Dense along the Arkansas-Louisiana state line. It has invested $150 million in undeveloped acreage where the Brown Dense is 300-550 feet thick at 8,000-11,000 feet in depth over a considerable area.
“We extensively reviewed the Brown Dense across the region and have indications that the right mix of reservoir depth, thickness, porosity, matrix permeability, sealing formations, thermal maturity and oil characteristics are found in the area of southern Arkansas and northern Louisiana,” Ponder emphasized.
He mentioned also that the principal differences between the Brown Dense in Louisiana-Arkansas compared to Mississippi are hydrocarbon type and depth, which is greater in Mississippi.
Ponder noted that Southwestern received the permit approval for its first horizontal well August 23. The well is planned to spud late in the third quarter of 2011 with a scheduled TVD of 8,950 feet, including a 3,500-foot lateral. It will be drilled east of the Dorcheat-Macedonia oilfield in Columbia County, Arkansas.
This is the field where Brammer Engineering drilled and completed a well in the Brown Dense in 2010. The well reportedly produced a paltry 49 bopd and 137 mcf of natural gas for a time and was shut-in.
It also was reported that the well encountered 2 percent H2S in the gas; this impacts profitability of a well, because it must be removed.
However, as with any yet unproven play, mum’s the word for the most part relative to critical information the already-drilled wells have revealed to the operators.
Southwestern plans to drill a second horizontal well in the play this year in Claiborne Parish, Louisiana. It is scheduled to have a 6,000-foot lateral and a TVD of 10,700 feet.
Eight more wells are planned for 2012.
Unconventional Barnett shale play kingpin Devon Energy announced early in August it’s hopping into the Brown Dense action, with its first horizontal well scheduled for September.
The company holds about 40,000 net acres prospective in the play. The drill site for the initial well is in Morehouse Parish, Louisiana, and proposed TD is 9,000 feet.
Vision Exploration has opted to focus its efforts in the Brown Dense condensate window, which ranges in depth from 12,000 to 15,000 feet in Mississippi and is rich in Btu content.
Walkinshaw noted that commercial production of gas and condensate doesn’t require the advanced levels of porosity and permeability as oil production.
His take on the Brown Dense is that like other oily resource plays, storage is key – and microfracturing created in the source rock via in-situ hydrocarbon generation is insufficient for oil production in commercial volumes at current prices and technology. He emphasized the need for additional matrix porosity and permeability, e.g., interbedded sandstone facies, to provide ancillary storage.
In the areas that appeal to Vision, certain clay constituents preserved above-average porosity and permeability by preventing the subsequent formation of diagenetic quartz overgrowths. Walkinshaw said such reservoirs can contain excessively rich gas and condensate at moderate depths with essentially no hydrogen sulfide and little carbon dioxide.
He theorizes the occurrence of hematite and other iron constituents within the sandstone lenses of the Brown Dense served to “scrub” a significant amount of hydrogen sulfide from those reservoirs as soon as they were charged.
Walkinshaw emphasized the modest lease bonus and royalty terms of the area, along with the potentially rich liquids yield, enable the play to make good economic sense, even at $4 per MMBtu gas.
Still, resource plays are resource plays, with all of the baggage that entails.
“Economics ultimately will drive the success of this play,” Ponder said. “As with all resource plays at this stage, we have very little data to help us model the performance.
“Only drilling will tell us,” he emphasized.
Ponder said they noticed that leasing activity picked up following Southwestern’s announcement July 28 about entering the play.
“It’s obvious from broker activity observed in the local courthouses,” he commented, “that other people are getting into the play.”