Oil Play Ditched in '90s Gets Revival Boost From EOG, Conoco

[thackney]

Oil Play Ditched in '90s Gets Revival Boost From EOG, Conoco
https://www.msn.com/en-us/news/money/oil-play-ditched-in-90s-gets-revival-boost-from-eog-conoco/ar-AAyDkhj
6/14/2018

The Austin Chalk, a vast underground ribbon of rock along the Gulf Coast, is garnering new attention this year, with drillers including ConocoPhillips and EOG Resources Inc. trumpeting efforts in an area the industry largely wrote off 20 years ago. Just last week, private-equity giant Blackstone Group LP sold royalty rights in the region for more than $400 million.

The revival is the latest testament to the oil industry’s improved health, with crude prices near $70 a barrel after a painful three-year slump. Explorers are betting the kind of drilling techniques that led to a boom in U.S. shale plays can also work on the harder, more unpredictable rock in the Austin Chalk.

“It is a play that I think is going to have a lot of legs," said Bernadette Johnson, a vice-president for researcher DrillingInfo Inc.

Blackstone’s sale followed a $2.7 billion deal in March by TPG Pace Energy Holdings Corp. to buy drilling rights on 360,000 acres in the Austin Chalk and the neighboring Eagle Ford shale basin. Conoco later announced it had grabbed 211,000 more acres while Marathon Oil Corp. said in May that it had acquired a “material position" in the Louisiana portion of the play.

The Austin Chalk’s now home to “some of the most prolific and highest return wells in the company," EOG Executive Vice President Ezra Yacob told analysts on a call May 4, though he warned it’s “still pretty early" in the area’s development....

[IsailedawayfromFR]

This of course makes lots of sense.

I worked the Austin Chalk in its heyday in 80s into the 90s.

It is characterized as a natural fractures play, where wells were drilled to encounter massive natural fractures containing oil and mostly open hole completions were set to collect the oil.  First done with vertical then by highly-successful horizontal wells.

The advent of the staged fracturing of the last decade makes it advantageous to go after the Austin Chalk in a similar fashion.  Lots and lots of  natural fractures were not encountered by wellbores, hence that oil remains out there and can be interconnected with massive fracturing.

This is a completely different concept than the unconventionals currently being developed as Chalks do not possess the abilities to create hydraulic fracturing like the brittle sands and carbonates we frac.  Yet, at the same time, they are indeed eerily similar as I believe the success of most liquids plays in unconventionals are not due to creating fractures for flow, but in inter-connecting natural fractures to obtain sufficient amounts to be economic.

In other words, if one does not possess natural fractures in a formation, one will not gain commercial wells.  Mother Nature is much more dependable on creating fractures that we could ever  be.

That is one reason I continue to believe the era of oil from unconventionals is limited.  There are just not geologically enough shales out there that possess the necessary fracture systems.

[Smokin Joe]

This of course makes lots of sense.

I worked the Austin Chalk in its heyday in 80s into the 90s.

It is characterized as a natural fractures play, where wells were drilled to encounter massive natural fractures containing oil and mostly open hole completions were set to collect the oil.  First done with vertical then by highly-successful horizontal wells.

The advent of the staged fracturing of the last decade makes it advantageous to go after the Austin Chalk in a similar fashion.  Lots and lots of  natural fractures were not encountered by wellbores, hence that oil remains out there and can be interconnected with massive fracturing.

This is a completely different concept than the unconventionals currently being developed as Chalks do not possess the abilities to create hydraulic fracturing like the brittle sands and carbonates we frac.  Yet, at the same time, they are indeed eerily similar as I believe the success of most liquids plays in unconventionals are not due to creating fractures for flow, but in inter-connecting natural fractures to obtain sufficient amounts to be economic.

In other words, if one does not possess natural fractures in a formation, one will not gain commercial wells.  Mother Nature is much more dependable on creating fractures that we could ever  be.

That is one reason I continue to believe the era of oil from unconventionals is limited.  There are just not geologically enough shales out there that possess the necessary fracture systems.

Something I noted in Bakken shale cores, and in my travels, is that fractures have a tendency to heal, unless something stops that. I have seen (in one core, one well) oil wet fractures in Anhydrite, but normally, those whould have healed pretty rapidly. It indicated that the oil was present below the Anhydrite when the fracturing occurred, and migrated in almost immediately, otherwise, the fracture would have healed.

In chalk, no doubt those old fractures have healed or been occluded by calcite, and reopening and interconnecting those might be the ticket.

[IsailedawayfromFR]

Something I noted in Bakken shale cores, and in my travels, is that fractures have a tendency to heal, unless something stops that. I have seen (in one core, one well) oil wet fractures in Anhydrite, but normally, those whould have healed pretty rapidly. It indicated that the oil was present below the Anhydrite when the fracturing occurred, and migrated in almost immediately, otherwise, the fracture would have healed.

In chalk, no doubt those old fractures have healed or been occluded by calcite, and reopening and interconnecting those might be the ticket.

A bit different, the chalk with the Bakken.  Not overpressured.  Fractures are huge.  I recall a bit dropping a few feet when it encountered one.

And the chalk is drilled without any drilling returns whatsoever.  All mud is sucked into the fractures, and oil and gas are flowing up the backside when one drills.

A strange animal.

[Smokin Joe]

A bit different, the chalk with the Bakken.  Not overpressured.  Fractures are huge.  I recall a bit dropping a few feet when it encountered one.

And the chalk is drilled without any drilling returns whatsoever.  All mud is sucked into the fractures, and oil and gas are flowing up the backside when one drills.

A strange animal.

That isn't a fracture, it's cave. We drilled into paleokarsts vertically in Nevada with similar results, and horizontally in the Radcliffe on the Nesson Anticline with the same. Just an occasional puff of gas from the wellbore and enough back pressure from cuttings and formation pressure to get MWD surveys.

[IsailedawayfromFR]

That isn't a fracture, it's cave. We drilled into paleokarsts vertically in Nevada with similar results, and horizontally in the Radcliffe on the Nesson Anticline with the same. Just an occasional puff of gas from the wellbore and enough back pressure from cuttings and formation pressure to get MWD surveys.

I drilled one well in the chalk when, in making the turn, the bit dropped a few feet and extremely large volumes of oil and gas were produced while we fought to make hole.

After over a week and producing +19,000 bo, we finally decided we had found enough of a fracture so we stopped.

[Smokin Joe]

I drilled one well in the chalk when, in making the turn, the bit dropped a few feet and extremely large volumes of oil and gas were produced while we fought to make hole.

After over a week and producing +19,000 bo, we finally decided we had found enough of a fracture so we stopped.

There is something about achieving your primary objective (finding oil) that somehow can alter those plans everyone in the office so dogmatically wants to follow. I have also worked wells for clients who pushed to ignore serendipity, often with less than optimal results. 

[IsailedawayfromFR]

There is something about achieving your primary objective (finding oil) that somehow can alter those plans everyone in the office so dogmatically wants to follow. I have also worked wells for clients who pushed to ignore serendipity, often with less than optimal results. 

In all honesty, I was the one wanting to continue drilling for the original horizontal objective, thinking I could make a very good well spectacular.  The drilling mgr talked me out of it.

[Smokin Joe]

In all honesty, I was the one wanting to continue drilling for the original horizontal objective, thinking I could make a very good well spectacular.  The drilling mgr talked me out of it.

I see where you may have been tempted to find just one more fracture, but I think your drilling mgr was wise on two counts.
First, the proverbial bird in the hand. 2500+ BOPD isn't bad in most areas, in some, very good.

Second, with that much cave, you were setting yourself up for all sorts of hole problems and possible (probable) complications, which may have lost the well you already had. With that much drop in your BHA, what guarantee do you have you will be able to get back in the hole on the other side of the cave with either drilling tools if you trip, or production pipe when you're done?

I think it was the right call to stop.

[IsailedawayfromFR]

I see where you may have been tempted to find just one more fracture, but I think your drilling mgr was wise on two counts.
First, the proverbial bird in the hand. 2500+ BOPD isn't bad in most areas, in some, very good.

Second, with that much cave, you were setting yourself up for all sorts of hole problems and possible (probable) complications, which may have lost the well you already had. With that much drop in your BHA, what guarantee do you have you will be able to get back in the hole on the other side of the cave with either drilling tools if you trip, or production pipe when you're done?

I think it was the right call to stop.

the latter reason was the chief rationale to stop. 

You know, 'a bird in the hand'

[MajorClay]

Horizontal drilling in the Austin Chalk is the way to go.  Wish I had thought of that 40 yrs ago when presented w the problems of vertical wells.

I'd be writing this post from a beach somewhere w one of those drinks w an umbrella in it.

[IsailedawayfromFR]

Horizontal drilling in the Austin Chalk is the way to go.  Wish I had thought of that 40 yrs ago when presented w the problems of vertical wells.

I'd be writing this post from a beach somewhere w one of those drinks w an umbrella in it.

I got one better.  Not quite 40 years ago I was approached in my office by two engineers who worked for Elf research outside Paris.  They said they had some interesting ways to drill a well horizontally, and asked whether my company was interested.

I laughed and asked them "Why would I ever need a well drilled horizontally except maybe to extend the reach from an offshore platform?"