(Source: Business Wire)
Granite Wash, an old-school tight gas play in the Atoka Formation, which extends from the Texas Panhandle into western Oklahoma, has more than a few new shale believers taking a second look -- and grabbing acreage where they can. Forest Oil, Newfield Exploration, Devon Energy, Chesapeake Energy, Apache Corp., Questar Corp. and MarkWest Energy Partners LP are among those whose stake in the area is now solid enough to start talking about it, Natural Gas Intelligence (NGI) reports.
In 2003 operators were drilling wells in the tight-sand gas reservoir with estimated ultimate recoveries (EUR) of around 1 Bcf/well, according to the Oklahoma Geological Survey. But that was oh-so-long ago -- light years in drilling technology. Fast forward to 2009. Forest Oil Corp., one of the largest operators in the trend with a 91,000-net acre leasehold, drilled its first horizontal well in April. The well came online at an initial production (IP) rate of 17 MMcfe/d; over four months the IP rate has averaged 7.8 MMcfe/d.
"Even though we've talked about plays like the Granite Wash for several years, we're seeing our ideas validated by us and others," said Forest CEO Craig Clark.
"If we only had two places in which to build the company, the Texas Panhandle and East Texas north of Louisiana would be as good as any," said Forest COO J.C. Ridens. The overall Granite Wash producing trend has fairly predictable geology which makes for better success rates and lower costs.
Forest's estimated horizontal well costs through completion are around $5.5 million, said Ridens. Forest is using a 6.5 Bcfe EUR for its horizontal wells in play, which is about the same EUR that Chesapeake Energy Corp. uses for its Haynesville Shale wells. Chesapeake recently has gotten the cost of its Haynesville wells to around $7.5 million to complete.
Newfield Exploration acquired its initial interest in the Stiles Ranch Field in 2002. At the time the field was producing less than 3 MMcfe/d using vertical drilling techniques. However, the operator took its successful horizontal drilling experience from the nearby Woodford Shale and put it to work in the Granite Wash. The results: Newfield in July reported that of the seven horizontal wells it has drilled since 2008, IP rates have averaged 22 MMcfe/d for all seven wells.
Newfield expects to drill 14 wells in the play this year. Drilling and completion costs are averaging $10 million/well gross; the most recent well was completed for $7.4 million. Longer lateral completions, lower rig rates and ongoing efficiency gains are expected to further improve returns until the end of the year, Newfield said.
To read more of this in-depth look at the Granite Wash play, including comments from Devon, Chesapeake, Apache, Questar, MarkWest and a new partnership including Tenaska Capital Management LLC, recently formed to develop infrastructure in the area, visit http://intelligencepress.com and sign up for a free trial.
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