A different breed of cat

Eagle Ford Joins Shale Elite

A still-fledgling shale gas play appears to be on the cusp of snagging a sizeable spot in the limelight alongside U.S. shale gas heavyweights such as the Haynesville, Marcellus, Barnett and others.

The newbie lies in south Texas in the Cretaceous Eagle Ford shale, which is long known for sourcing hydrocarbons to Austin Chalk fields as well as the renowned East Texas field. The play extends from near the Mexican border outward to the east/northeast across several counties.

It’s early in the drilling game, but so far the shale appears to offer relatively high well production rates and low drilling costs – a combo essentially guaranteed to warm the heart of any operator.

This being Texas, there’s plenty of oil and gas infrastructure in place, along with large areas of ranch land available for leasing from owners long comfortable with – and knowledgeable about – the industry.

In other words, this won’t be a repeat of the earlier frenzied leasing activity in the still-relatively new Jurassic Haynesville shale play concentrated in northwest Louisiana. As the hype intensified there, landowners began demanding – and receiving – lease bonuses that soared into the stratosphere in many instances.

Petrohawk Energy Corp., which has hit significant home runs in the Haynesville play, was first up to the plate in the Eagle Ford play, where it now has 16 wells on production.

The company drilled the discovery well – the STS-241 #1H – in the fall of 2008 in what would be christened Hawkville Field. The horizontal well in LaSalle County flowed 7.6 MMcf and 250 barrels of condensate per day from the Eagle Ford.

Petrohawk validated the play when it moved about 14 miles to the southwest and drilled the Dora Martin #1-H.

In contrast to the discovery well, the horizontally drilled Dora Martin tested 8.3 MMcf/d with no condensate, even though completed at essentially the same TVD of 11,500 feet.

‘Something Funky’

This difference in production makeup is an intriguing aspect of the play.

The Hawkville, where Petrohawk holds 216,000 net acres, is in a kind of mini-basin, or natural topographic low, containing high porosity and high-resistivity facies, and positioned between the Edwards and the Sligo shelf margins.

The field is characterized by a downdip dry gas play in the southwest, a mid-dip gas/condensate and an updip oil play.

Dick Stoneburner
Dick Stoneburner

“There’s something funky going on,” said AAPG member Dick Stoneburner, executive vice president and COO at Petrohawk. “There’s burial history or a lot of things you can throw into the equation on why there are different thermal maturities at each end.

“We think it’s pretty clear it’s mainly a function of burial history,” he said. “The southwest end of the field at one part was considerably deeper than today, but it’s been uplifted.

“This is a plausible interpretation based on the presence of the Chittim arch, which is a prominent Laramide feature,” Stoneburner said. “That would have had the ability to affect that end of the field and have it uplifted to the present depth, so the theory has support based on burial history and regional tectonics.”

With regard to mineralogical makeup, the Eagle Ford is a different breed of cat from what you might expect in a shale. Some samples contain as much as 70 percent calcite and a goodly bit of silica, with average clay content tallying 11 percent, according to Stoneburner.

“It’s very brittle rock and not water sensitive,” he said. “It has the perfect mineralogical makeup for a shale gas play.”

He noted that the Eagle Ford is so full of gas and so permeable, the rock actually falls apart as the gas is liberated when a core is brought up to, say, 15 pounds of pressure.

“We haven’t seen any fracturing in the Eagle Ford core data we’ve seen,” Stoneburner commented. “This is a key difference with the Haynesville.”

The Price Is Right

The Eagle Ford wells appear to lack the high deliverability or ultimate recovery potential of the impressive Haynesville shale wells, but they’re far less expensive on a per well basis. In fact, the development cost comparison between the Haynesville, Marcellus and Eagle Ford indicates they’re very comparable, according to Stoneburner.

He noted Petrohawk’s first Eagle Ford well topped out at $14 million and required 60 days from spud date to TD. The last 10 wells they drilled averaged about 17 drilling days and ran up an average tab of $5 million each.

Stoneburner emphasized geophysical support helped considerably to extend the limits of Hawkville beyond what was originally mapped. The field now spans 90 miles east-west and 15 miles north-south.

The company has an extensive 2-D grid and anticipates receiving its first set of 3-D data in the first quarter of 2010. More 3-D data will be coming in later, which is a good thing given that Petrohawk has latched on to yet another 25,000 net acres outside Hawkville.

Pioneer Natural Resources recently announced a major Eagle Ford discovery near Pawnee Field in Live Oak County about 60 miles southeast of San Antonio.

The Sinor #5 well reportedly flowed at an initial rate of approximately 8.3 MMcf/d and 500 barrels of condensate per day. The well was completed in a 2,300-foot lateral with a nine-stage frac stimulation. It reached a TVD of approximately 13,000 feet.

According to Scott Sheffield, chairman and CEO at Pioneer, the initial results of the well were highly encouraging, particularly given the significant volume of condensate and natural gas liquids. A second well has kicked off, and more are planned across the company’s reported 310,000 gross acres in the play.

Pioneer has considerable experience drilling horizontal wells in the Edwards section, underlying the Eagle Ford.

Leasing activity is going gangbusters throughout the play where a number of other familiar names are in the game, including EOG, Swift, Anadarko and St. Mary Land & Exploration.

Perhaps the most profound yet unspoken statement about the play’s potential is that the big guys are here as well.

Both ConocoPhillips and Exxon Mobil have reportedly acquired large acreage positions but are keeping mum on their plans.

Optimism rules.

“The recent results of other active players in the trend bodes very well for establishment of a much more regional accumulation than just Hawkville field,” Stoneburner said, “and we’re encouraged by the success of other players and the expansion of the play.

“We think the activity will change dramatically over the course of the next year,” he added, “and change positively.”

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