Wednesday, June 19, 2019

EOG Astounds With Record Drilling Time

Today the final total depth was reported on SONRIS for the EOG Ironwood 37H-1.  EOG drilled the well in an astounding 18 days where they averaged 1018 feet per day.  ConocoPhillips' Erwin #1 was drilled in 46 days including taking conventional core.  The Hebert #1 took 54 days based on SONRIS reported data.  EOG's drilling and operational team has proved excellence once again.  Let's hope for an astounding initial potential. Their rig is heading to the Brunswick #1 which will be a vertical drill where they plan to take a conventional core in the Austin Chalk.




Monday, June 17, 2019

ConocoPhillips Hebert #1 Result

ConocoPhillips (COP) released an initial potential for the Hebert #1 on Friday.  Like the McKowen #1, it begs many questions.  If these volumes are post-flowback then this is a very disappointing result.  The details will become apparent over the next 1-2 months.

Initial Potential (IP): 206 barrels of oil per day, 134 thousand cubic feet of gas per day, and 4279 barrels of water per day.

COMPLETED 5/21/19 AS A OIL WELL IN THE AUS C RA SUA RES;PM F; 206 BOPD; 134 MCFD; 3729 SITP; 1871 CP; 27/64 CK; 4279 BWPD; 650 GOR; 37 GRVTY; PERFS 14086-19320' (ST: 10)
SONRIS

Let's start with what we don't know:
-Frac design: proppant/water volume, stage/cluster details, and pressures
-Reservoir pressure
-Mudlog: lithology and gas
-Geosteering; wellbore path and landing zone
-Timing of the volumes that were released as the initial potential 
-Chlorides of the produced water. Is is frac or reservoir water?

There are several potential interpretations from this limited amount of data:
1) The Austin Chalk in this area might not be brittle enough so it doesn't respond well to a "high proppant" frac.  COP obtained a conventional core of the entire Austin Chalk in their 3rd well, the Erwin #1.  They have good "rock" data to make this determination.  I'm highly confident that the Erwin #1 will be landed in the best target zone.
2) Landing too high above the base of the Austin Chalk results in the frac penetrating too high into the more water-saturated reservoir section.  I didn't have a 2D seismic line through this wellbore like I did for the McKowen #1 so I can't analyze as accurately the landing zone of the horizontal wellbore.  I generated a grid on the Base of Austin Chalk ("BAC") horizon from surrounding vertical wells which allowed me to examine the landing zone location.  I estimate that the wellbore was consistently located approximately 80' above the BAC.  I would ideally seek a lower landing zone to best impact the highest TOC section.  Without having COP's geosteering data, it's hard to be confident on the landing zone interpretation (see graphic below).
3) The results that were submitted represent a time period early in the flowback period where the frac water volume is very high.  Future monthly production volumes will prove or disprove this theory.
4) The "high proppant" frac is intersecting natural fracture clusters that are connected to water-wet zones.  Both the McKowen #1 and Hebert #1 are located above deep-seated, dip-trending salt ridges that could have created abundant natural fractures (future post).
5) Austin Chalk oil in this area might be thermally immature.  COP's core data from the Erwin #1 will prove or disprove this theory.
6) Being that we're on well result #3 in the Louisiana Austin Chalk 3.0 era, much research and development lies ahead.  Continued trial and error will be required during the first fifty wells.  The "Permian mania" didn't happen after the first three horizontal Wolfcamp wells.





Wednesday, June 12, 2019

Prime Rock Resources and New Dawn Energy Form A Joint Venture


Prime Rock and New Dawn announced a joint venture today.  The maps below depict the acreage in the Austin Chalk Play.  The large combined contiguous block is within and adjacent to Masters Creek Field that has produced over 45 MMBOE since the 1990's (25.2 mmbo, 116 bcf, 310 mmbw)  The depths of the "core" block range from 14000'-19000' TVD.  It is located south of the Fredericksburg Shelf Edge in the downdip "D" fairway.  Depletion and water production will be the likely risks on the acreage within the old field boundary.

For more details:
PRESS RELEASE - CLICK HERE








Tuesday, June 11, 2019

EOG Permits A 2nd Well In The Downdip Fairway

The EOG LAMS Stack resurgence continues with a new permit in the downdip fairway.  The EOG Brunswick #1 is located in Pointe Coupee Parish (29-T4S-R9E).  Note that the LA Office of Conservation has misspelled the well name. I confirmed the lessor name with the Assessors Office (see assessor tract map below).  From what I hear, the rig will come from EOG's current drilling location (Ironwood 37H-1).  The Ironwood is likely to finish drilling at the end of this week in record time.

The Brunswick permit states 17100' as the planned total depth which indicates a vertical hole.  I'm assuming that the horizontal details will be added later.  If not, then this could be a vertical pilot hole where conventional core might be obtained.  At the surface location, the Base of the Austin Chalk should occur at approximately 16788' measured depth which provides about 300' of "rat hole".  This will be their deepest well to date.  Upon completion, EOG will have one well in each of their three lease areas.

As I detailed in a prior post on the "regions" across the play, this downdip area has much more complex geology than that of the updip fairway.  Growth faults, that were initiated during the time of Tuscaloosa sand deposition, pose potential limitations on lateral length due to the fact that one wouldn't want to drill across a fault with throw ranging from 100-300'.  The surface location of the Brunswick #1 is directly north of the first Tuscaloosa expansion fault.  The geologic complexity increases dramatically south across that fault.  EOG's lateral will occur between the Fredericksburg Shelf Edge and the first Tuscaloosa expansion fault.  A local fault to the north traps a small accumulation of gas in the Tuscaloosa sands to the east.  The structural dip orientation in the block might lead EOG to orient the lateral directly up structure.  Another aspect of the downdip fairway is that dip direction changes within fault blocks.

The Chesapeake Schexnayder #1, an Austin Chalk horizontal well, was drilled in July, 1997 (3.65 miles east).  It had an initial potential of 768 bopd and 300 mcfgd.  It produced only 32 MBO and 8 MMCFG.  This well was drilled during Austin Chalk 2.0 in the 90's when the theory was to drill an open hole lateral across natural fractures.  From these well results, one might conclude that the well didn't intersect many oil saturated fractures.

Most significant, the Amoco Beaud #1 (2.1 miles east) drilled through the Austin Chalk.  The logs reveal 85' of high resistivity, high log-calculated TOC, and oil saturated chalk/marl section.  The bottom 150' of the Austin Chalk averages 3% on the density porosity log with "spikes" up to 6-7%.  This location has lower porosities than that of the EOG Ironwood 37H-1, but is more likely to have natural fractures, higher pressure, and more natural gas.  All three of those factors can assist with oil production.

The lowest 40' in the Austin Chalk appears to be very chalky which should present a good "landing zone".  The interval above presents a cyclic chalk/marl sequence very similar to that seen in the Marathon Todd #1 core.  The frac should be designed to impact the bottom 85' of the section.

This will be an exciting exploratory well.  The "downdip" players (Devon, Marathon, Petroquest, Torrent, Blackbrush, and Cimarex) will be watching closely.























Monday, June 10, 2019

Australis Goes 2 For 5 in the TMS

Australis confirmed the rumors today that they've failed to achieve a problem-free TMS well once again.  They're now 2 for 5.  The press release below details another problematic lateral wellbore.  They also confirm a drilling "pause" after well #6.  Let's hope for an EOG acquisition!

PRESS RELEASE
http://www.australisoil.com/irm/PDF/1651_2/TMSUpdateJune2019

Thursday, June 6, 2019

CGG and Fairfield Geotechnologies Join Forces on Large WAZ Survey in South Central Louisiana’s Austin Chalk

Today CGG and Fairfield provided a press release regarding the Marathon Austin Chalk 3D aquisition project.  The project has been in progress for some time now.  I understand that acquisition will begin soon.
The map below depicts an outline of Marathon's acreage and an estimated boundary for the 3D seismic shoot.  The 3D will cover the core of the Marathon acreage block.
--------------------------------------------------------------------------------------------------------------------------
CGG and Fairfield Geotechnologies Join Forces on Large WAZ Survey in South Central Louisiana’s Austin Chalk
Houston, USA – 6 June, 2019
CGG and Fairfield Geotechnologies have signed a cooperation agreement to acquire a large-scale, multi-client survey in South Central Louisiana. The new 578-square-mile wide-azimuth survey, known as Bayou Boeuf, is designed to image the Austin Chalk play and provide a better understanding of the formations in this area which have recently regained industry interest.
The Bayou Boeuf survey provides coverage over the Avoyelles, Rapides, Evangeline and Saint Landry Parishes. Permitting is nearly complete and acquisition is expected to commence in September 2019.
Delivery of fast-track products and final results is expected for Q1 and Q3 2020 respectively. The data will be processed by CGG using an advanced AVO-compliant sequence in order to ensure the final data is reservoir-ready, paving the way for a fast-track Reservoir Characterization Package (ResPack Fast) that will deliver key elastic rock property volumes to assist in further development of the reservoir.
Joe Dryer, President – Multi-Client Geosciences, Fairfield Geotechnologies, said: “This area has attracted attention from numerous oil and gas majors and large independents and is expected to be the anchor for additional survey growth. Both CGG and Fairfield Geotechnologies will be marketing this program.”
Dechun Lin, EVP, Multi-Client & New Ventures, CGG, said: “The Austin Chalk is a prospective play that has been gaining interest among operators in the industry. The aim of our Bayou Boeuf survey is to provide a better understanding of the geology in the area, unlocking its potential. The combined expertise of our two companies, both of which are highly experienced at operating in challenging areas, working with the government and local communities, and delivering high-quality results, will ensure the success and industry value of this survey.”
About CGG
CGG ( www.cgg.com ) is a fully integrated Geoscience company providing leading geological, geophysical and reservoir capabilities to its broad base of customers primarily from the global oil and gas industry. Through its three complementary business divisions of Equipment, Acquisition and Geology, Geophysics & Reservoir (GGR), CGG brings value across all aspects of natural resource exploration and exploitation. CGG employs around 5,100 people around the world, all with a Passion for Geoscience and working together to deliver the best solutions to its customers.
About Fairfield Geotechnologies (Formerly FairfieldNodal)
Privately held Fairfield Geotechnologies ( www.fairfieldgeo.com ), a pioneer and global leader in ocean bottom and land nodal seismic multi-client surveys and data processing services. In addition to its extensive multi-client database in the Gulf of Mexico Shelf and Permian Basin, the company continues to expand licensing coverage in the Lower 48 through focused investment and strategic acquisition of existing multi-client libraries.
Contacts
Group Communication & Investor Relations, CGG Christophe Barnini Tel: + 33 1 64 47 38 11 E-Mail: invrelparis@cgg.com President Multi-Client Geosciences, Fairfield Geotechnologies Joe Dryer Tel: +1 281 275 7654 E-Mail: jdryer@fairfieldgeo.com

Wednesday, May 29, 2019

ConocoPhillips McKowen #1 - Geological Post-Evaluation

ConocoPhillips' first well, the McKowen #1, has been closely watched by the industry.  I provided a detailed post on potential interpretations of the initial potential that they released.

Below I'm sharing my geological and geophysical evaluation of the horizontal wellbore with respects to the rock properties of the Austin Chalk formation.  I've integrated the data released by ConocoPhillips ("COP") through SONRIS.

The cross section schematic below is drawn to actual scale except for the "cartoon figures" at the surface and the vertical height to the surface.  The wellbore, faults, and formation tops are to scale.  The cross section is parallel to the wellbore heading from north-northeast to south-southwest.  The geological/geophysical interpretation is my own.  I've been interpreting well logs, 2D seismic, and 3D seismic in this area for 29 years.

The cross section illustrates that the COP well was drilled within a graben.  Minor faulting was encountered during the vertical hole in the Midway, Selma, Taylor, and Austin Chalk intervals.  The initial 2/3's of the horizontal also appear to be "quiet" with regards to faults.  The final third of the wellbore intersected two faults, one of those exists through the entire Upper Cretaceous chalk section.  It is at this point in the wellbore that COP reported that they "encountered losses".  This makes sense that drilling mud was lost into the fault/fractures.  They also reported that the losses were "cured".  That's typically achieved by placing lost circulation material ("LCM") into the wellbore to "plug up" the fractures.  This is a common practice in the Austin Chalk, but it always presents potential damage to the rock formation.  The chemistry of the Austin Chalk is very sensitive to drilling fluids.  It's possible that part or all of the wellbore sustained some damage which could inhibit production.  The large rate of produced water indicates that permeability exists somewhere to deliver that large volume.  Placing a large-proppant frac on top of potentially partially damaged reservoir creates some unknowns.  COP chose to stop drilling the well after they experienced the losses.  This shortened the lateral to 3600'.  It's unfortunate that the well wasn't drilled to planned total depth.

The additional well in the second diagram, Osprey LA McKowen #1 is a vertical conventional well that I drilled in 2006 which is just west of COP's well.  The Osprey well drilled through both the Austin Chalk and Tuscaloosa Marine Shale.  The second graphic presents a correlation of the Austin Chalk and Eutaw in both wells.  The logs indicate slightly higher resistivities in the COP well along with slightly lower gamma rays.

The third graphic presents a Passey Log display highlighting a profile of the calculated "total organic carbon"("TOC") section of the Austin Chalk.  In the Osprey well, the basal 135' has the best porosity and the highest TOC's.  COP has not released their porosity logs from the McKowen #1.  These wells are located very close so similar rock parameters are expected.


 The fourth graphic presents the gamma ray and resistivity in the COP well.  At approximately 100' above the base of the Austin Chalk, a bentonite volcanic ash bed exists.  These are common in the Austin Chalk representing the large volcanic activity at this point in the Cretaceous.  It is important to understand the vertical and spatial distribution of these beds because they create barriers and seals within the reservoir.  It's well known that they can wreak havoc on a frac job.

This is from a technical paper on the Niobrara Formation (same geologic age as the Austin Chalk):
 Not only do the bentonite (and marl) interbeds divide the chalks into multiple subtle mechanical stratigraphic intervals, but marly intervals with most abundant bentonites impact hydraulic fracture efficiency by limiting proppant placement to the main chalk benches. While fluid-filled fractures have rather extensive vertical propagation throughout the Niobrara A-B-C at peak pump rates, fracture offsets across bentonites and ensuing proppant embedment phenomena eventually render the main marl intervals as barriers to effective stimulation.
CLICK HERE FOR FULL ABSTRACT

The fifth graphic creates a composite of some key information.  My integration of the directional survey of the wellbore and subsequent "landing zone" is 100' to 135' above the base of the Austin Chalk.  The 135' is at the "heel" of the wellbore and it slowly drifts down to 100' above at the "toe".  If this is accurate, that indicates that the landing zone is not only above the best saturated reservoir and source rock, but it's also above the volcanic ash barrier which would impact the proppant distribution in the frac in the downward direction.  Lastly, the gamma ray also indicates that the best "chalky" zone (low gamma) for landing the well is at the very base of the Austin Chalk.  COP drilled a vertical pilot hole so they had that to use for guiding geosteering into the lateral.  I don't have access to that data.

One final thought is presented in the last graphic. The water saturation increases overall as you progress vertically upward in the Austin Chalk.  Landing higher puts the wellbore in a zone with higher water saturations.  This reason alone could explain the high water volumes in the well if it's not still producing frac water.  I estimate that the McKowen #1 still has 40% of the frac water that has yet to produce back.

In summary, if my interpretation of the landing zone is correct, the wellbore missed the best target zone.  The 2nd well, the Hebert #1, drilled a full lateral and I've not heard of any issues with it.  I hope that they landed this well lower in the section.  Those results will be interesting in the weeks ahead.