Remember the Austin Chalk horizontal drilling boom that revved up in the late 1980s?
Coming on the heels of one of the industry’s most painful downturns, the play quickly morphed into THE place to drill in the United States.
It was a heady time, and south Texas was at the heart of the action.
Even the rustic Dilley Café in the hamlet of Dilley in Frio County had its 15 minutes in both the local and national media as being a kind of headquarters-central for cutting deals, while savoring the local cuisine.
Heck, some folks were actually touting drilling prospects sketched out on their hands, reminiscent of old-time wildcatters.
The play cast a spotlight on the potential of the relatively new technology of horizontal drilling. The near-frenzied activity soon spread across the chalk fairway eastward into Louisiana.
The fractured Upper Cretaceous Austin Chalk Formation had confounded industry players for years when it came to nailing down the intricacies of the plumbing system and identifying sweet spots. Vertically drilled dusters were the rule rather than the exception.
Even with the new lateral drilling technology, the formation continued to frustrate operators.
In addition to seasoned industry types, the highly hyped play attracted a number of get-rich-quick wannabe oil barons. They jumped into the fray willy-nilly, envisioning big old can’t-miss fractures awash with oil.
To be sure, some successful lateral wells were completed in the new play, just not enough to maintain the early momentum – and hype.
Ultimately, even some of the more savvy veteran players began to pack up and go elsewhere as they often encountered dry holes and/or uneconomical production. When some of the pricey deeper wells in Louisiana failed to pan out, it was particularly painful.
But it ain’t over ‘til it’s over, and companies continue to drill economic wells – just don’t call it a boom anymore.
It may come as a surprise to many industry participants that the Austin Chalk’s geology and production potential are still on the radar for some high level researchers.
Think U.S. Geological Survey (USGS).
In 2010, the federal agency released its Assessment of Undiscovered Oil and Gas Resources of the Upper Cretaceous Austin Chalk and Tokio and Eutaw Formations, Gulf Coast.
This was the agency’s first assessment of the Austin Chalk since 1995, according to AAPG member Krystal Pearson, Gulf Coast assessment team member and research geologist at the USGS in Denver, who presented a poster on the Chalk at the recent AAPG Annual Convention and Exhibition in Long Beach, Calif.
The Energy Policy Conservation Act of 2000 mandates that the USGS provide such assessments of priority basins in the United States – prioritized based on resource potential and federal land percentage.
These priority basins hold about 96 percent to 98 percent of the known oil and gas resources for the United States.
The assessments use a geology-based assessment methodology based on geologic elements of a total petroleum system (TPS) that includes:
Using this approach, the USGS defined three conventional assessment units (AU) and one continuous (unconventional) for the Austin Chalk.
“The USGS assessment methodology defines conventional accumulations as those with good permeabilities and porosities, well-defined boundaries and hydrocarbon-water contacts,” Pearson said.
“In contrast, low permeability continuous reservoirs have diffuse boundaries and lack obvious traps and seals,” she continued, “although they may be affected by large scale structures, such as anticlines and fracture networks.
“Reservoir characterization as either conventional or continuous has strong implications for assessment of undiscovered resources and production strategy.
“The Austin Chalk is a low to moderate primary porosity and low permeability reservoir that requires interconnected fracture networks for oil and gas production,” Pearson said. “It behaves as a hybrid system with varied geologic settings contributing to both conventional and continuous hydrocarbon accumulations.”
Well, you ask, why keep doing repeat assessments on basins?
“Things change, drilling patterns change, and we have more data,” Pearson noted. “We have more well history and just so much more to work with since 1995, so the Chalk needed to be updated.
“Geologic models and concepts have evolved as well,” she continued, “and our understanding of how to classify continuous versus conventional is always evolving.”
She emphasized that it’s not always crystal clear where to draw the lines – as evidenced by the Austin Chalk, with its combo of the two.
Assessment unit lines in essence are geological boundaries in that there must be a geological reason to denote a line.
“You need to have some geological occurrence or setting that’s going to lead you to separate either two conventional assessment units from each other, or a conventional unit from a continuous,” Pearson said. “That could be regional structure versus local structures, fracture systems and what’s contributing to them, oil and gas generation windows ... Not all conventional and continuous reservoirs operate on fracture permeability.
“We could be doing another assessment three to four years from now on the same rocks, the same section,” she continued. “We’ll use new data at that point with the same methodology as this time and see how the numbers change or not as time progresses.”
Pearson emphasized drilling patterns suggest the historic Austin Chalk trend, including Giddings and Pearsall Fields, produces from primarily continuous reservoirs. This is in contrast to other Austin Chalk reservoirs in the region, where production methods, such as vertical drilling, imply it is a conventional reservoir.
This shift in philosophy is likely owing to current drilling focused at the margins of major structures.
“Recent work provides a more refined understanding of the Austin Chalk as a hybrid system reservoir in which lateral drilling programs and reservoir stimulation techniques may only be advantageous in reservoirs that are dominantly continuous,” Pearson noted.
Results of that work have not yet been released in print. Meanwhile, there’s reason for Austin Chalk players to smile.
Of the four assessment units defined for the Chalk, almost one billion barrels of oil were designated just for the one continuous unit.
The Austin Chalk oil is sourced from the underlying liquids-rich Eagle Ford Shale, which is one of today’s leading hot spots for horizontal shale drilling and production.