22N 1E. Interesting. Thanks
Skip -- or Whomever __ what's your thoughts on this.
SWN can not rely on other energy companies to prove up the Brown Dense, they have far too much at stake. No other companies seem to be interested in drilling in the BD at this point. By going to vertical wells SWN can stretch their exploration dollars to cover a wider area with more wells. A vertical wellbore can be cased to allow for an amended permit and a horizontal lateral if the rock looks good. Their last two wells are "lease" wells and do not require forced integration to drill so they are skipping the unit application process. They can go back and form a unit later if the area warrants additional wells. I expect that SWN will bring in a second drilling rig soon and they will need to have additional locations and permits to accommodate a two rig schedule. IMO SWN should have followed this course from the beginning instead of waiting for other operators to drill BD wells. None of the other companies have the same urgency to unlock the economics of the BD.
It should be clear by now to those members that thought, and stated, that SWN had it all figured out from the get go and knew all the "sweet spots" that there was little existing science and that the Lower Smackover/Brown Dense prospect was a huge challenge and could take years to define. Laymen just can't seem to grasp that it is a regular occurrence in the energy business for companies to invest millions of dollars in leases and then discover that the formation(s) was not economically productive or that some significant portion of the overall leasehold is not viable.
This is an interesting development. According to my old maps 31-21N-1E is south of the first of the regional Smackover faulting and it's TVD of 10,400+ shows that they are going to be drilling near the downdip limit of the LSBD oil window. Depths greater than 11,000' are speculated to be within the gas condensate window, given the heat gradient and burial history of the area but in reality nobody yet knows.
I am no expert in horizontal drilling and fracing but what I've heard is that you want to stay away from faulting so as to avoid communication with water bearing zones from above or below. It does appear that so far the low perm Brown Dense has resisted fracing to some degree given the lower than hoped for flow rates. That may be because the correct frac for the formation has not yet be designed or it may mean that the down dip areas, with faulting and likely greater natural fracturing, will be the key. Another factor in these areas might be that gas and condensate, being lighter and less viscous than oil, will flow through the formation at significantly higher rates.
Good points, Robert. I think your last concerning hydrocarbon migration may be especially significant.
Skip, and others:
CEO Mueller's comments to the UBS conference explained what is going on in this well. It is not simply about continuing to prove up the Brown Dense. SWN encountered an unexpected high pressured zone in their third well. He explained their plan is to drill a vertical (cheaper) to delineate where that zone goes. If they find it again, SWN will possibly convert the well to a horizontal or drill another vertical to confirm that the zone is large enough to be commercial.
Thanks, John. I read Mr. Mueller's comments. My point is that SWN claimed early on to have a number of data points defining the Brown Dense. Those of us who knew that very few wells of sufficient depth had been drilled across the AOI and that a number of those wells were of an age that the logs were of marginal value if there was a log at all were curious. The mere fact that SWN has had to reference existing wells as much as thirty miles apart in their unit applications in areas where thousands of wells have been drilled confirms that there was little existing science. I suppose the early statements may have been for the benefit of stockholders and analysts. Then Mueller stated that they would wait on other companies to drill L SMK wells. At that time it seemed plausible but curious as there were wells permitted and drilling by others. The only problem with the scenario was that the wells by XTO and Devon were not in the SWN AOI but on the far periphery and on the Monroe Uplift. Cabot drilled their one well and then did not permit another. Understandable considering their relatively meager leasehold. The whole play started with an unexpected "kick" in another company's well in 2009. SWN should have been searching for the higher pressure areas from the beginning. And using the vertical well approach to do so. I guess better late than never.
Good insight, Skip. I think you now kinda do have a good feel for this rather complex puzzle, so to speak.
(On a sidebar, and I hope no one takes this joke of mine too seriously -- but I can only be reminded of a hidden ball being rapidly moved about under a walnut shell and positioned next to two empty walnut shells.)
Yep, that's what all of this yammering reminds me of, i.e., to me, it sorta smells somewhat like a "shell game."
Skip, what was the 2009 well that 'kicked' off the play?
I was told on very good authority by an area geologist that the 2006 Greystone OXY well in 19-19N-5E encountered shows in the LSBD, the operator ran pipe and got hydrocarbons to the surface before it was abandoned. I do not know the type and quantity of the recovery but the shows were significant enough to set casing to TD of 11,550'.
This well was a conventional Smackover test located within the Monroe Field on Oxy (Cities Service) fee. Following up on my earlier post today, I really believe that the best potential for the LSBD will lie in the downdip areas where the pressures are greater, the hydrocarbons lighter and more mobile, and where natural fractures are more abundant due to the proximity of faulting.
I think you absolutely right... I would like to add another benefit in addition to higher pressures, natural fractures, & smaller hydrocarbon molecules will be that the higher concentrations of gas that will almost certainly be present will continue to provide lift long after the higher pressures have been depleted...
A possible development strategy for the LSBD might be to first target down-dip geology to exploit the benefits listed above & as then drill up-dip wells after technology has improved & the rock is better understood...
And don't forget the Manville 13-10 from 1984 was only 3 miles south of this new permit.
The well that kicked back in 09' was the Weiser Brown Exxon Mobil #2 and it flowed about 600Bopd for a week without being fracd then they shut it in