Little Known TMS Play Sees Drilling Surge

American Association of Petroleum Geologists (AAPG)

As the shale evolution continues in The Patch, some plays tend to grab the spotlight far more than others.

Think of the high-profile Bakken and Eagle Ford, for example.

Meanwhile, there’s a potentially Big One not widely talked-about, which has been drawing operators’ interest and drilling money off and on since the early 1970s.

It’s the Cretaceous-age Tuscaloosa Marine Shale (TMS), which occurs across central Louisiana and into southwestern Mississippi. It is age-equivalent to the now-famous Eagle Ford formation in Texas.

The early drilling efforts produced considerable frustration but not much oil.

It’s a different story today with successful completions being reported.

The current surge of drilling activity is widely believed to have been triggered by a 1997 study estimating seven billion barrels of oil awaiting recovery via the drill bit. The study and ensuing publication originated at Louisiana State University’s Basin Research Institute, which is now the Basin Research Energy Section of the Louisiana Geological Survey.

Despite its “fits and starts” drilling history, the TMS has begun to garner some respect – specifically, it appears to be on the brink of becoming a bona fide commercially productive play.

Halcon Resources recently announced the signing of a definitive agreement with credit funds and accounts managed by affiliates of Apollo Global Management LLC, which will invest up to $400 million in Halcon’s wholly owned subsidiary, HK TMS LLC.

This is a major happening.

Kirk Barrell
Kirk Barrell
“That was the first big capital provider that’s really blessed the play,” said AAPG member Kirk Barrell, president of prospect generator Amelia Resources, based in The Woodlands, Texas.

East Side, West Side

Barrell has 24 years of experience in the Tuscaloosa Trend, which rose to industry fame in the 1970s for its humongous volumes of deep gas production.

Also an avid TMS blogger, he has come to be the go-to person for ongoing info.

The play is generally viewed as comprising two main areas, dubbed TMS West and TMS East.

To the west, the geology appears to be less attractive for drilling success – at least for now.

TMS East can be defined geographically as beginning in Avoyelles Parish and spreading eastward. It has proved to be the core area of the play.

“The key so far for the East is, at TMS time you have an influx of siltstones coming from those deltas updip, so you have a very nice interbedded siltstone layer with the organic layer,” Barrell said. “That’s providing a nice mix of the organics and siltstones, giving you porosity for storage.

“My research indicates those siltstones are very correlative with the presence of natural fractures,” he noted. “I think the TMS East, why it’s working, is you have that siltstone influx that gives you the natural fractures, and that’s key to productivity.

“As the hyperbolic (decline) curve flattens out, those siltstones have porosity in the matrix to contribute more reserves,” Barrell added. “The West doesn’t have that deltaic influence, so it will be a different lithology, a different mineralogy.”

Even so, the two are age equivalent, and he noted that there may be sub-plays. Sustaining production there is a big unknown.

EOG and Indigo Minerals are partnering 50/50 to drill a well in the western area in Vernon Parish.

Blessed Time

Activity is on the rise in the eastern core region where Goodrich Petroleum, Halcon and Encana are the principal players.

Goodrich holds more than 300,000 acres in the play, where it has announced several completions. Part of the company’s success can be attributed to its hybrid frac jobs. Goodrich president and COO Robert Turnham Jr. explained that this is a combo of slick water and gel, noting that they think the slick water provides some fracture complexity, and the gel transports the proppant out into the formation.

Currently, Goodrich is running three rigs in the TMS and announced recently that it intends to go to as many as five rigs by the end of the year, pending on continued success.

Halcon announced that it plans to spud 10-12 operated wells in the play, running an average of two rigs, in 2014. Additionally, the company expects to participate in 15-20 non-operated TMS wells in 2014.

Meanwhile, the play is beginning to attract the up-and-comers, such as Sanchez Oil and Gas, which has already spud a well, and Comstock Resources.

In an unusual twist to the long-reigning “tight hole” mentality adopted by industry operators, the TMS players are sharing information, according to Barrell. This approach no doubt will have a considerable positive impact on progress overall.

He noted that 3-D seismic is not being used. That may change soon given that operators are starting to talk about it, and 3-D vendors are showing interest.

Leasing is ongoing although it’s late in the game, and the days of building a big, contiguous land position from the get-go are so over.

“I’ve been surprised to date that the Big Boys haven’t shown up,” Barrell said. “And I think we’re going to see some interesting events in the next six months.

“I believe the play is getting blessed by the industry now,” he added.

“There have been a lot of good results over the past few months, and for a late entry, from a value perspective, I still think it’s one of the best value investments today, compared to other plays.

“This is due to the fact that the risk has declined,” he said, “and the entry cost is still very reasonable.

“I’m as optimistic as I’ve ever been,” he said.

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Cracking the Code of the Tuscaloosa Marine Shale

There is considerable talk these days about “cracking the code” in the myriad complex shale plays, which vary geologically even within the same play.

According to AAPG member Kirk Barrell at Amelia Resources, the “code” for the Tuscaloosa Marine Shale might best be viewed as being comprised of three parts: drilling, completion and production.

It’s a code that appears to be pretty much deciphered.

♦ Cost was the last barrier to increased activity in the eastern core area of the play, according to Barrell. That has changed as drilling days have declined in number, now tallying 25-28. This has been achieved by both Halcon and Goodrich Petroleum. Only a few weeks ago, 45 days was the norm.

“In the last eight weeks, there have been some significant strides made,” Barrell emphasized. “A well-per-day drilling cost is about $100,000, so 20 days off is about a $2 million cost reduction; so that’s considerable progress.

“Also, the point of access is the naturally fractured zone,” he noted, “and it was giving a lot of headaches when they would build curve through those natural fractures.

“They changed the angle to about 70 percent, so that seemed to crack the code for the drilling side; you want to penetrate a minimal amount of that fracture zone when drilling that curve.”

♦ Regarding completions, Barrell noted that the players figured out they have to land in the lower part of the shale. The laterals range between 6,000 and 7,200 feet, and about 575,000 pounds of proppant per fracing stage are the norm.

“I think they’re very comfortable with their completion recipe,” Barrell said, “and feel like they’re getting very consistent results with that.”

♦ When it comes to production, Barrell said that the decline curves are looking good.

“They’re hyperbolic,” he said, “and when flattening they’re putting these wells on pump and seeing real good sustainable rates.”

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