Monday, April 22, 2019

ConocoPhillips Erwin #1 - Conventional Core

It's very encouraging to see that ConocoPhillips (COP) obtained conventional core in their 3rd Austin Chalk well, the Erwin #1.  The report on SONRIS indicates that COP attempted to recover 283' of core. Hopefully they had success in recovery.  This continues to show how COP is preceding with a smart and very deliberate exploratory approach to proving up their large acreage position.

The cross section below confirms that the core was well placed and long enough to capture the entirety of the Austin Chalk.  These rock data will provide excellent data including porosity, permeability, saturations, gas volume, oil gravity, and geochemistry.  In addition, geological attributes such as facies and rock type can be determined.  These data will be integrated into their petrophysical analysis and will assist with drilling, completion design, and production.

Wednesday, April 17, 2019

Powering The United States

This is a very informative presentation that all Americans should understand.  The average American doesn't even know where electricity is sourced from.

Monday, April 1, 2019

Austin Chalk "Throw Back" From 2013

Here's a "throw back" from January, 2013.  It's very interesting to see Devon back in the trend.  Hopefully they have a much better run this time.

Thursday, March 28, 2019

Regions - Geological Comparison and Contrast

In my November 5, 2018 post, I presented detailed maps illustrating geographic regions across the Austin Chalk Trend.  This allows for comparison and contrast across this vast trend.

The table below provides a comparison and contrast of the geographic regions of the Austin Chalk in Louisiana and Mississippi.  Due to the fact that I've not evaluated the Texas Austin Chalk trend to the same extensive detail that I have in Louisiana, I'm only presenting the table for LA and MS.

The table subdivides various attributes into the categories of geology, hydrocarbons, and log analysis.  At the top, the range in depth for the base of the Austin Chalk is presented.  The updip limit of my region line is not based on any geochemical maturation data, but is purely based on a consistent distance from the shelf edge.  The top line does align with the shallowest production in Giddings Field (Texas).  The updip limit will be defined in the future as wells delineate this important termination point.  At some point updip, the Austin Chalk of Louisiana/Mississippi will be immature.  It's very likely that the updip limit varies across the play due to variations in burial depth and local tectonics.  Giddings Field in Texas (TX-Central) produces as shallow as -5200' (SSTVD).  In Texas the Eagle Ford provides most of the hydrocarbon source.  The downdip limit across the entire play has yet to be defined.  Pressure, temperature, costs, and economics will be the limiting criteria at some point.

Today I will focus on the geological aspects of the play. One of the major contrasts between the updip and downdip fairways in Louisiana is the geological structure.  I use the Lower Cretaceous (Fredericksburg) Shelf Edge as the defining boundary for updip and downdip.  The updip region exists upon a very stable Lower Cretaceous platform which results in a simpler and "quieter" geological structure.  The region exhibits gentle monoclinal dip with limited faulting.  Drilling and staying "in zone" will be much easier in this region.  Dip occurs in the southwestern direction.

Example of the structure in the Updip Region (Source: Amelia Resources LLC)

South of the Fredericksburg Shelf Edge in the downdip region, the basinal setting presents an environment for major subsidence, accommodation space, depositional faulting, and salt tectonics.  South of the shelf edge is a very typical Gulf Coast basin with 3-way and 4-way structural closures.  Structural dip in a given fault block can occur in any direction as a result of the complex depositional faulting.  These structures trapped and produced 1.4 trillion cubic feet equivalent of natural gas from the expanded Tuscaloosa Sands.

Example of the structure in the Downdip Region (Source: Amelia Resources LLC)

At the Austin Chalk level, most faults are strike trending and parallel the shelf edge with splinter faults oriented in oblique directions.  Continued subsidence after the deposition of the Tuscaloosa clastics, presents large faults displacing the Austin Chalk with throws ranging from 50-500'.  The orientation, spacing, and throw of these faults can present significant challenges to drilling a horizontal wellbore that has a 5,000-10,000' lateral.  Crossing over a 250' fault wreaks havoc on geosteering and zone placement. 

I believe that the most important risk in the downdip region is the risk of fracking into the faults and natural fracture clusters connecting to large water sources.  In the downdip region of LA-WEST, Masters Creek, Burr Ferry South, and Cheneyville produced on average 6.29 barrels of water per barrel of oil.  Many wells in Masters Creek had ratios as high as 10-35.  In contrast, Burr Ferry North in the updip region produced 0.5 barrels of water per barrel of oil. The same low water ratio is seen on trend in the northern updip portion of Brookeland Field in TX-EAST.  A large proppant frac in the Masters Creek fairway could produce a lot of water.

Cross section schematic (Source: Amelia Resources LLC)

Fortunately, for the downdip operators in LA-EAST,  a merged mega-3D seismic survey is available across most of the deep Tuscaloosa fields (Seismic Exchange Inc.).  We acquired most of these data in the early 90's while I was at Amoco. The 3D will be a key technological tool for success in that environment.  EOG and Devon have acquired most of the leases in this area.  It is for this reason that Marathon, in partnership with CGG and Fairfield, is acquiring a very large 3D survey (500 square miles) across their downdip acreage in LA-WEST.

A conventional core from West Feliciana Parish reveals a very cyclic sequence of chalk and chalky-marl facies.  The higher TOCs occur in the chalky-marl facies. Higher gamma ray also occurs with the increase in marl content.  On a regional basis, the LA-West region generally contains a higher percent of chalk facies.  This is likely due to the ancestral Mississippi River sourcing clastics into the LA-EAST region.  In 1992 while at Amoco, our research center preformed a geochemical study on the Tuscaloosa Trend oils (LA-EAST).  The Austin Chalk was confirmed to be a source rock.  It's very possible that the hydrocarbons in LA-WEST are sourced from older formations.  The gas/oil ratios in Masters Creek Field greatly contrast those in southern Avoyelles Parish.  Resistivities are also lower in LA-WEST compared to LA-EAST.  

SP and Gamma Ray

Gamma ray correlated to facies and rock type

This play across Louisiana and Mississippi will likely see contrasting results in the four sub-regions: LA-EAST Updip and Downdip, LA-WEST Updip and Downdip.  Each sub-region appears to have its "pros and cons".  Simple geology is great for drilling and producing.  Many like oil over gas.  Shallower and simpler is cheaper.  Pressure "is your friend" when producing low perm reservoirs, but it's not easy to drill through.  Marathon's first well is evidence to that.  Faulted structures with varying dip orientations are challenging for planning a horizontal drilling program.  An abundance of old vertical wells penetrating the Austin Chalk presents the opportunity to perform detailed log analysis with an understanding of spatial variability.  Thick high TOC with higher porosities is always the best.  And most importantly, the highest IRR's provide play longevity.

Sunday, March 24, 2019

ConocoPhillips McKowen #1 Results

I highly recommend that you read my post from March 13. 

ConocoPhillips released an initial potential for the McKowen #1:
COMPLETED 3/8/19 AS A OIL WELL IN THE AUS C RA SUA RES;PM F; 60 BOPD; 34 MCFD; 4806 SITP; 1748 CP; 24/64 CK; 3498 BWPD; 567 GOR; 36.4 GRVTY;PERFS 15048-18745' (ST: 10)

Interpreting an initial potential from the second well of a new exploratory unconventional play is idiotic.  The first question is “what day during flowback do the initial potential numbers represent?”.  Without knowing that, interpreting them is a moot point.  The Office of Conservation rules regarding initial potentials are very broad so an operator can release data from any time during the flowback.  Would ConocoPhillips purposely release numbers from early in the flowback to make the well look bad? Maybe. All is fair in love and war.  Why would they?  To scare off competition.  Is this likely? Maybe.  
I believe that ConocoPhillips is doing everything possible for this play to be a success and taking care of their stakeholders in the process.

The formation is mostly water bearing
The cores from the well exhibit a high TOC % indicating the presence and thickness of hydrocarbon source rock.  Known hydrocarbons in-place can also be calculated from well logs.  The well sustained a significant “gas kick” at the end of the wellbore.  It was so significant, that ConocoPhillips chose to stop drilling earlier than planned.  The initial potential gas rate of 34 mcfgd does not align with a large gas kick.  Also, the flare, while sputtering due to water, burns like a much higher gas rate. 

The formation is still producing frac water back
Most important to note is that the frac job injected 240,000 barrels of water.  At a daily rate of 3500 barrels of water, that takes 68 days to produce.  On March 22, we estimate that the well had been flowing 23 days.  That water volume indicates that only 34% of the frac water has been produced.  If the water rate has been higher, then maybe the well is 60% through flowback.  On day 23, the well appeared to still be producing approximately 3500 barrels of water per day.  Tubing could assist with producing the water. Keep your eyes out for a workover rig.

Low formation porosity is limiting hydrocarbon production
It’s possible that the oil and gas numbers are low due to lower matrix porosity in the formation.  The well might be primarily producing only the frac fluids from the frac-induced fractures. 

The large proppant frac could have penetrated into a large water-bearing natural fracture cluster
The proppant volume was 72% above the average volume used last year at Giddings Field in Texas (see table and chart below). They used 4625 pounds of proppant per foot which is very high.  It's possible that this penetrated water-bearing natural fractures either above or below the target high-TOC zone.  The fracture cluster intersected at the end of the wellbore could be the culprit zone.

Source - DrillingInfo/SONRIS
Source: DrillingInfo, SONRIS

There still isn’t enough data.  Not knowing the percent chlorides of the current water production makes it impossible to know whether the water is from the formation or the frac job.  Only ConocoPhillips knows this.  Based on the data we have to date, I conclude that nothing will be known until the frac water has been produced.  A full month of production for March will be posted on SONRIS soon enough….and then April, and May….

ConocoPhillips has planned an excellent pilot drilling program with wells scattered very well geographically and geologically.  They have significant experience with drilling and completing horizontal wells in the same geologic formations in Texas.  After 4-5 wells, some initial interpretations can be made.  Ultimately, a 12 month decline curve is the first real data indicating whether a play is economically viable.  The upcoming COP and EOG wells will be very important for the play.
Patience, patience, patience.

Tuesday, March 19, 2019

Active Drilling - Southern U.S.

The map below provides an excellent view of current drilling activity in the southern U.S.  The Permian is still the main focus of the industry.  The Eagle Ford, Scoop/Stack, and Haynesville are maintaining a steady pace.  The Gulf of Mexico is still quiet compared to historical activity levels.  The Louisiana Austin Chalk and LAMS Stack Play look forward to results from ConocoPhillips, EOG, and Marathon this year.

Source: DrillingInfo

Wednesday, March 13, 2019

Texas Austin Chalk Wells - Early Results

It was interesting in the first phase of the TMS (2011-14) when operators and Wall Street "suits" were comparing the first ten TMS tests to the 9,000th Eagle Ford well.  After 9000 completions, the Eagle Ford operators were far along on their drilling and completion design.  Comparing TMS well #9 to Eagle Ford well #9000 wasn't quite "apples to apples".  But hey, life isn't fair.  

Fast forward to today, and we're on our second Austin Chalk 3.0 completion in Louisiana and the comparisons to Texas have already begun.  While the ConocoPhillips McKowen #1 is still flowing back frac water, the landowners are already spreading false rumors of a 2000 barrel of oil per day initial test.  Let's hope that they are correct.  Prior to the EOG Eagles Ranch 14-1 frac job in Avoyelles Parish, landowners were spreading rumors of a similar result.  2000 barrels must be the lucky guess or fortune tellers have taken over St. Francisville!

Being that the Austin Chalk 3.0 era has been active in Giddings Field (Texas) for a few years, I thought that it would be interesting to review the first 30 completions there starting in 2014.  Some interesting observations:

  • It took seven wells for the first initial potential to exceed 1000 boepd
  • In the first 13 wells, only one has produced over 500 MBOE
  • It took 14 wells to exceed 1500 boepd
  • It took 21 wells to exceed 2000 boepd
  • It took 30 wells to exceed 2500 boepd
  • The 30th well had the best initial potential at 2511 boepd (imagine that!)

The first Louisiana AC-3.0 well, the EOG Eagles Ranch 14-1, had an initial potential of 1120 bopd and 1157 mcfgd (1313 boepd).  That result exceeds the first 13 wells in Texas.  An Eagles Ranch well test reported eleven days later was 2240 bopd and 1837 mcgd (2546 boepd).  That test exceeds all of the first 30 Giddings wells.

Source: DrillingInfo

Initial tests are not significant in the long run.  They're most important to stock "pumpers", acreage "flippers", and royalty buyers.  Monthly production over time and the decline curve present the key data.  

Here are my observations on the first 12 months of production:

  • The Eagles Ranch 14-1 produced 143 MBOE.  
  • It ranks 11th compared to the first 30 wells in Giddings Field. 
  • This 1st well in Louisiana outperformed the 29th well in Giddings.
  • The 1st well in Louisiana outperformed 19 wells of the first 30 at Giddings Field.

Most important to note, the 30th well in Giddings had the best 12 months.  So what do we conclude?....the operators get better results through time.  It's no surprise that the 30th well outperforms the first 29 wells.
Source: DrillingInfo, SONRIS

Each play is different.  Even within a given play, the reservoir rock exhibits variability.  It really takes 100 wells to truly understand Phase 1 of any new unconventional play.  So sit back and enjoy watching the first 30 wells in Louisiana.  I'm sure that the Wall Street "suits" will be full of vinegar along the ride!

Wednesday, February 20, 2019

Louisiana Austin Chalk Results - Managing Expectations

The interest, anxiety, and expectations regarding the initial potential of the ConocoPhillips McKowen #1 are very high. 

I call the new Austin Chalk play across Texas, Louisiana, and Mississippi "Austin Chalk 3.0".  Austin Chalk 1.0 was drilling vertical wells in search of natural fractures. Austin Chalk 2.0 was drilling horizontal wells across areas of known vertical fractures.  Austin Chalk 3.0 is targeting thick, saturated rock with higher matrix porosity.  For this reason, one can "wipe the map clean" of all prior Austin Chalk producers. More importantly, one might stay away from areas with good naturally-fractured production.  A large proppant hydraulic fracturing job on produced fractures is likely to produce significant water.  To date in Louisiana, we only have one Austin Chalk 3.0 completion, the EOG Eagles Ranch 14H-1 in Avoyelles Parish.

Austin Chalk 3.0 has been very active over the past year in the southwestern corner of Giddings Field.  The focus area is where the Austin Chalk historically didn't produce well.  It also is an area exhibiting higher porosities.  

The chart below illustrates results from the top 21 wells in southwestern Giddings Field.  It compares the initial potential on a BOEPD basis for 1000' of perforated interval.  The best results range from 300-540 boepd/1000'.  The EOG Eagles Ranch 14H-1 produced 309 boepd/1000'. This chart will be updated once the McKowen #1 results are known.

Monday, February 11, 2019


Stop by and visit us at NAPE this week. BOOTH 4131

Amelia Resources LLC Offers 400,000 Net Acres in the 

Louisiana Austin Chalk & LAMS Stack Play at the 

NAPE Summit

NEW ORLEANS--()--Amelia Resources LLC announces the offering of 400,000 net acres in the Louisiana-Mississippi Austin Chalk and LAMS Stack Play at the NAPE Summit.
“EOG, ConocoPhillips, and Marathon are leading the industry into this emerging unconventional play. With comparable rock properties to the successful Austin Chalk completions in Texas, our acreage package presents the opportunity for a new entrant to obtain a leadership position in the play.”
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Amelia Resources announced today that it will be offering 400,000 net acres for sale in the Louisiana-Mississippi Austin Chalk and LAMS Stack Play at the NAPE Summit in Houston, Texas, February 13.
Amelia's President, Kirk Barrell, said, "EOG, ConocoPhillips, and Marathon are leading the industry into this emerging unconventional play. With comparable rock properties to the successful Austin Chalk completions in Texas, our acreage package presents the opportunity for a new entrant to obtain a leadership position in the play.”
With 28 years of evaluation experience in the Tuscaloosa Trend, Amelia Resources has performed extensive evaluation of multiple targets including the Selma, Austin Chalk, TMS, Tuscaloosa, Wilcox, Frio, and Lower Cretaceous.
Barrell stated, "As a thick source rock across the Tuscaloosa Trend, the Austin Chalk presents a large hydrocarbon resource occurring only 800’ above the Tuscaloosa Marine Shale (TMS). With a new TMS initial test of 1458 barrels of oil equivalent per day at a cost of $10.3 million, these stacked formations present an excellent opportunity to leverage multiple targets.”
Amelia Resources LLC is a privately held exploration and production company. The company generates drilling prospects and is actively engaged in several projects across the onshore Gulf Coast. The company has closed $300 million of transactions in the TMS, Eagle Ford, Permian, Austin Chalk, and Terryville Plays over the past seven years. Amelia was founded in 2003 by Kirk Barrell and has offices in New Orleans and St. Francisville, Louisiana. The company leverages its 33 years of geological and geophysical experience to obtain strategic positions in drilling projects. Updates on the Austin Chalk and TMS projects are provided by the company at:

Wednesday, January 30, 2019

Australis Announces Drilling Results in the LAMS Stack Play

Australis Oil and Gas announced their 2018 4th quarter TMS well results. 
Here are the well updates in Amite County, Mississippi:

  • Stewart 30H-1: 
    • 1458 boepd (IP)
    • 1248 boepd (IP30)
    • 18/64 choke
    • 6850' completed lateral
    • 30 day cumulative: 37,425 boe (35,302 bo)
    • $10.3 million (drill, complete, tie-in, artificial lift installation)
  • Bergold 29H-2:
    • Drilling issues in the lateral
    • 2000' lateral length
    • 6 stages
    • Remedial operations underway to establish flow parameters
  • Taylor 27H-1:
    • 6800' lateral length
    • awaiting completion operations
  • Williams 26H-2:
    • Drilling lateral at 13095' MD
  • Saxby 03-10 2H:
    • Surface hole drilled
  • Quin 41-30 3H:
    • Surface hole drilled
The Stewart 30H-1 represents an excellent result. A 1458 boepd initial potential with a 30 day average of 1248 boepd and a $10.3 million well cost presents competitive economics with other unconventional plays.  The Taylor 27H-1 will be closely watched for repeatability.  The Bergold 29H-2 represents drilling inexperience in the trend. Drilling results should improve over time.  Their remaining $65 million from the Macquarie credit facility is contingent upon success.  After a 50% drop in their stock price, I'm sure their investors are hoping for continued success.