Tuesday, November 29, 2011

Scout Report - November 29, 2011

This week's Scout Report:
https://sites.google.com/site/tuscaloosatrend/scout-reports

EOG Assembles TMS Acreage Position

EOG continues to build a TMS lease position in "stealth" mode.  Information gathered from DrillingInfo and the courthouses indicate that they've assembled approximately 120,000 acres across the play.  This has not been announced or confirmed by EOG.  Based on their position in the Eagle Ford, they appear to like the oil window.  Rumor has it that they might be seeking a partner in the TMS.  With ~80,000 acres in the higher resistivity, and ~40,000 acres in the lower resistivity, they appear to be "hedging" their bet on the rock properties of the shale.


EOG Eagle Ford leases (Source: http://www.eogresources.com/)

Monday, November 28, 2011

TMS Locations Total 15

Confirmed Tuscaloosa Marine Shale locations now total 15 in this current "TMS Era".  This includes permits and proposed/accepted unitization.  Devon appears to be very active on the east side preparing additional pad sites.  When will Goodrich and EOG join the party?

Tuscaloosa Marine Shale Locations (Permitted and proposed/accepted unitization)

Sunday, November 27, 2011

Encana Applies For A TMS Unit In W. Feliciana Parish

Encana has applied for a 1040 acre Tuscaloosa Marine Shale unit in West Feliciana Parish.  The proposed rectangular unit, TMS RA SUA, is located in Lake Rosemound Field and is oriented north-south.

Tuscaloosa Marine Shale locations

Sunday, November 20, 2011

Devon's TMS Cross

Devon permitted an additional TMS location:
-API: 1703720154    Serial#: 244122   East Feliciana Parish, LA
-Field: Richland Plantation
-MD: 19000   TVD: 13900   Lateral length: 5100'
-Location: Section 74-1s-2e; S 64 D 32' 04" W - 21,604.10' FROM NGS MONU. "TALBOT" IN SEC 74. PBHL: N 26 D 59' 55" E - 6,000.02' FROM SURF LOC IN SEC 71.

With six locations confirmed, Devon's initial plans are making sense.  Their "cross" well pattern tests the TMS in strike and dip directions.  After completing these wells, they will have rock properties, pressures, and hydrocarbon mix across their acreage position.
Devon Energy's TMS locations.

Anadarko Hits An Austin Chalk Homerun

Anadarko has successfully completed another Austin Chalk well.  The Lacour 43-1 had an initial potential of 3000 bopd, 2500 mcfgd, and 600 bwpd, 3800 FTP, 4900 SITP, 600 CP, on a 20/64 choke.

Thursday, November 17, 2011

Encana Releases TMS Acreage Details

Encana presented this map at the Bank of America Merrill Lynch 2011 Global Energy Conference this week.
Source: http://www.encana.com/  Bank of America Merrill Lynch 2011 Global Energy Conference
Entire presentation:
http://www.encana.com/investors/presentations/pdfs/20111116-BAMLBrillon.pdf

Devon Lane 64-1 Reclassified

Devon's Lane 64-1 vertical TMS completion has been reclassified as "Status 31: Inactive Dry Hole Future Utility".  This "science" well could likely be used for micro-seismic in the future.

Source: SONRIS

Justiss Oil Expands TMS Exploration To The West

Justiss Oil has just permitted a new horizontal TMS well in southern Sabine Parish.  This location expands TMS exploration efforts almost to the LA/TX state line and targets the TMS shallower than the Indigo wells.
-Serial: 244108   API:1708522393
-MD: 14000'   TVD: 9000'
-Location: 91' FNL & 2386' FWL OF SEC 23. PBHL: 330' FNL & 271' FEL OF NE/4 OF NW/4 OF SEC 14.
Justin Oil VUA;ZAP MINERALS ETAL #1 (#24 on map)

Monday, November 14, 2011

Devon Beech Grove 68H-1 - Status

A recent Devon letter regarding TMS unitization states that the Beech Grove well is "currently being flowed back for cleanup at a rate of 120 bopd and 312 bwpd".  This is consistent with information available on SONRIS.  With continued flowback, the oil rate should increase along with a decreasing water rate.

As with all shale plays, the economic viability of this play will not be known until a years worth of production has been observed from 10-20 wells.  Initial rates, pressures, yields, and first year decline rates will be key variables.

Tuesday, November 8, 2011

Scout Report - November 8, 2011

The blog hit 100,000 page views today.  Lets hope that the upcoming tests in the Beech Grove and Weyerhaeuser wells take this play to the next level.

This week's Scout Report:
https://sites.google.com/site/tuscaloosatrend/scout-reports

Recent TMS Locations From The Sky

Our airborne scout team took some recent photographs of the active locations.

Devon Lane 64-1

Encana Weyerhaeuser 73H-1
Devon Beechgrove 68H-1

Monday, November 7, 2011

Encana Rig Moves to Horseshoe Hill

Encana's rig has arrived at the Horseshoe Hill location in Wilkinson County, MS.

Photo courtesy of Joe Rollins

Sunday, November 6, 2011

Geaux Tigers!

While keeping aligned with the "Tuscaloosa" theme of this blog, I have to stray a bit on this one.  What a great victory.  Geaux Tigers!

Chesapeake's McClendon Comments on the TMS

Not sure how McClendon calls the TMS pricey at $200-250 per acre.
"Or just simply, I think the industry, including us, is running out of places where you could go put together big leasehold positions. And we're not chasing anything in California, and we're not chasing the -- for example, the Tuscaloosa Marine shale and some other things. That would be pretty pricey to get involved in."
Aubrey McClendon, CEO, Chesapeake Energy

Transcript:
http://seekingalpha.com/article/305430-chesapeake-energy-s-ceo-discusses-q3-2011-results-earnings-call-transcript?part=qanda

Thursday, November 3, 2011

Devon Beechgrove - Wellbore Diagram

Source: SONRIS

Swift Discusses The Austin Chalk On Earnings Call

Swift Energy's Earnings Conference Call: Austin Chalk highlights:
"In Central Louisiana and East Texas, we’re utilizing new technology to transform a mature asset base to a growth area. Our large partnership area with Anadarko in the Burr Ferry area of Vernon Parish provides ample running room for a multi-year drilling program targeting the Austin Chalk. We’re also reevaluating the Austin Chalk and our Masters Creek field to further assess further development opportunities there. The non-operated well, the GASRS 16-1 was completed in the Austin Chalk and had an initial production rate of 207 barrels of oil per day and 1.3 million cubic feet of gas per day. This production rate is significantly lower than the first two wells drilled in the area. This well was an appraisal well and was drilled near the southern extend of the company’s joint operating area where it did encounter fewer natural fractures while drilling than what we see in the wells drilled further to the north. This well will be an extremely important well for us in further understanding the geology in the area and will assist us in designing the most effective development plan for this Burr Ferry area.  The Swift Energy operated GASRS 20-1concluded drilling operations during the third quarter and has been completed. A mechanical problem occurred during the initial cleanup of the well that required a work over rig to resolve. A work over rig is currently on this well and work is under way to remedy the issue. This well bore remained in zone for the entirety of the 4254 foot lateral and encountered high natural fracture density in the formation along the strong tubing pressure. GASRS 20-1 well was drilled further north than the non-operated GASRS 16-1, and we believe it will be a highly productive well once we have resolved the mechanical issue."

Q&A
"Marcus Talbert – Canaccord Genuity
Okay, great, thanks. I guess looking at the most recent Austin Chalk wells, is there anything that you can point to I guess outside of the fewer natural fractures that you encountered on the 16-1 well that led to the result that we got?
Bob Banks
We have got a couple of working theories about what caused the lower fracturation in that well bore down to the south. One would be, we are getting much further away from the Sligo shelf margin where you have more tectonic activity. The other theory would be that it’s flattened out a little bit down there. The depths aren’t the same, it’s a little flatter area and there is less faulting in that area. So that could have also contributed to the less fracturation. So, those are the things the guys are working on now to try to understand down in that southern extend, what's controlling the fracturation down there.
Marcus Talbert – Canaccord Genuity
Okay, great, thanks. And I guess just looking at that southern extend on the map that you have here. Was the 16-1 offset to the 18-1 well or was that further south and east even further south of the (inaudible).
Bob Banks
Yeah, further south, further south. Yeah, it’s kind of right down at the end of the line down there.
Marcus Talbert – Canaccord Genuity
So it’s the very most southern well that you drilled to-date there in the Burr Ferry?
Bob Banks
Yeah, that’s right.
Marcus Talbert – Canaccord Genuity
Oh, yeah, that’s correct."

Source: Seeking Alpha

Encana BOE #1H - September Production

Austin Chalk - Initial Potential Comparison

Wednesday, November 2, 2011

Scout Report - November 2, 2011

This week's Scout Report:
https://sites.google.com/site/tuscaloosatrend/scout-reports

Devon Seeks JV Partner For Five Projects Including the TMS

"Devon Energy Corp. (DVN) said Wednesday it is looking for a partner for five exploratory oil and gas projects in various states as it seeks to share costs and improve capital efficiency.  Speaking to analysts in a conference call, executives of Oklahoma-based Devon said the company was looking at the possibility of establishing a joint venture agreement in the Tuscaloosa Marine Shale in Louisiana, the Mississippi Lime in Oklahoma, the Niobrara Shale in Wyoming, and the Utica Shale and the Michigan Basin in Ohio.  Devon Executive Vice President Exploration and Production David Hager said a joint venture would allow the company to eliminate the large amount of money it has to invest acquiring acreage and redeploy that capital back into drilling or share repurchases.  'We have been conducting the data room. We've had outstanding interest from the companies who reviewed our acreage position,' Hager said.  The joint venture structure is still open, but it is likely it will follow the arrangement of other agreements, which stipulate a large amount of cash to be paid up front, the company said. Devon is not looking for several partners but rather one that could be interested in developing all of the areas.  Separately, Devon said it has continue to see higher oilfield service costs. The price for drilling rigs and other service have increased about 2% in the third-quarter compared to the previous quarter. Overall, the company expects a 10% to 12% increase of costs this year. 'We expect that we will see some pressure on costs primarily in the service sector as we go into 2012,' said Darryl Smette, Devon's executive vice president marketing and midstream.  The Permian Basin in Texas is the area where Devon has seen the biggest increase in service costs, while prices have continued to grow fairly rapidly also in Canada, Smette said."
Source: Dow Jones

Tuesday, November 1, 2011

Encana Earnings Call - October 20, 2011

The Tuscaloosa Marine Shale highlights from the call:
"During the quarter, we captured additional acreage in the Tuscaloosa Marine Shale bringing our total land position in this play to approximately 270,000 net acres. We completed an existing horizontal well in Amite County as part of our joint venture agreement and we are very encouraged by the results.  The well had a 30 day initial production rate of 310 barrels per day of light oil from 5 effective completion stages. This well has been on production for about 125 days and we forecast an expected ultimate recovery of 145,000 barrels of oil. We’re currently drilling the first of two planned horizontal wells targeting a 7500’ lateral length with 30 planned completion stages and expect to begin completion activities in November."
Question and Answer Session:
CALLER: In the TMS, the well that you mentioned earlier in your comments. What was the cost of that well and what do you expect a 30 stage 7500’ lateral well to cost?
ENCANA: the well I quoted is the well that…are you talking about the well that we’re currently drilling? 
CALLER: Yes, that was one of them and the past well that you mentioned earlier. 
ENCANA: The past well is a well we inherited in a joint venture partnership, so I don’t have the information on that. The well that we’re drilling today is not really going to be indicative of our long term development costs so it’s very difficult to peg that particular well but I think in the early the days, the wells will be, you know, in the $10 million range and as we’re able to apply scale, we’ll come down to a lower number.
Webcast: 

https://event.on24.com/eventRegistration/EventLobbyServlet?target=registration.jsp&eventid=364390&sessionid=1&key=DF8FDA0F53FC0DEA67CE503908FF24FF&sourcepage=register

Louisiana Mid-Continent Oil and Gas Association: Energy Sector Report


The Louisiana Mid-Continent Oil and Gas Association just released Dr. Loren C. Scott's report on the energy sector and it's impact on Louisiana.  It contains some impressive statistics.
Executive Summary: