Curtesy of TulsaWorld.com
Horizontal drilling breathes new life into Mississippi Lime oil region
by: ROD WALTON World Staff Writer
Saturday, September 24, 2011 - 9/24/2011 4:05:06 AM
A mighty Mississippi is starting to flow in the middle of Oklahoma’s resurgent oil and gas industry.
This potential river of oil occupies what is called the Mississippi Lime – porous limestone formations in northern Oklahoma and southern Kansas. The liquids-rich region, considered tapped out by vertical drilling decades ago, has been yielding reservoirs to horizontal operators such as SandRidge, Chesapeake, Devon and Tulsa-based Eagle Energy LLC during the past two years.
“I think it’s probably the hottest play going in the country,” Eagle CEO Steve Antry said. “We’re producing 4,000 barrels of oil equivalent per day, which is nice.”
Certainly not bad for a company that formed only two years ago. Eagle holds about 75,000 acres in the horizontal Mississippi Lime trend stretching across several counties.
Others are betting big on the region, which reaches as close to Tulsa as Osage County, attracted to the promise of wells with an oil ratio above 50 percent. With natural gas prices fetching less than $4 on most markets, the “oily” Mississippi Lime is a river of opportunity to the state’s producers.
The irony is that these “new” reserves actually lie slightly below formations that were big producers 100 years ago. Phillips Petroleum Co., for instance, made its name in the nearby Burbank Field, on the eastern edge of the play that includes Osage, Pawnee, Kay, Garfield, Woods, Alfalfa and other northern Oklahoma counties.
“It’s sort of amazing that all of this has been sitting there and waiting for horizontal drilling,” Antry said. “The vertical wells hardly drained any of that.”
The gas-rich shale plays first brought major producers back to the domestic fields about 10 years ago. Names like Barnett, Marcellus, Haynesville, Bakken and Woodford Cana became synonymous with unconventional drilling and revived U.S. energy reserves.
The move now is toward the deposits containing mostly oil and natural gas liquids. The Mississippi Lime’s ratio is often 52 to 55 percent oil, according to reports.
“We’re into the second tier of this renaissance,” said Chip Minty, a spokesman for Oklahoma City-based Devon Energy Corp. “Now what we’re doing is taking the same technology beyond the shales to the carbonates, such as limestone.”
Tulsa-based RAM Energy Resources Inc. is certainly intrigued by the promise of the Mississippi Lime, although it is currently focused on the chat formation just above it. RAM is spudding several wells into the chat on its Osage County concessions this weekend.
“Two years ago we began to investigate this play, as it’s the kind of thing that’s right up our alley,” RAM spokesman Robert Phaneuf said. “It’s a reasonably low-cost play where hydrocarbons have been found before, with a lot of wells drilled in the past. And that gives you good data points.”
In fact, the Mississippi Lime, which begins at a depth of about 5,000 feet on average, has about 17,000 vertical data points – seismic information, etc. – throughout the trend, Antry said. The growing number of horizontal data points now exceeds 500.
“You don’t need 3-D,” Antry said. “The nice thing about this trend versus the shale is it requires low-horsepower equipment.”
The limestone’s porosity and natural fractures also can mean less expense on the drilling and hydraulic fracturing parts of the project. Expenses can total half and even a fourth of typical unconventional well efforts.
And the results so far are looking good. Eagle’s Longhurst 3H-34 well in Woods County is maintaining average production of 2,076 barrels of oil and 4.2 million cubic feet of natural gas per day.
“It’s a monster,” Antry said.
But there’s a warning: The Mississippi Lime infatuation is so new that caution is warranted. Some experts see hit-or-miss scenarios.
“There’s going to be sweet spots, but not everything will pan out,” said Dan T. Boyd, petroleum geologist with the Oklahoma Geological Survey. “There are spots that are incredibly juicy, and they’re going to make a lot of money.”
Oklahoma City-based Chesapeake Energy Corp. jumped into the lime quickly as a way of balancing out its natural gas-dominant portfolio in the wake of low prices. Devon also is making moves in that direction and is curious to see how the Mississippi Lime will compare with shales and other generous plays.
“It’s a new venture,” Minty said. “We have a lot to learn and long way to go.”
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Rod Walton 918-581-8457 email@example.com