By OGJ editors
HOUSTON, Feb. 26 -- SandRidge Energy Inc., Oklahoma City, has slashed its drilling pace in the West Texas overthrust and taken a large write-down while expressing encouragement at the potential of the most recent of the three thrusts discovered.
SandRidge is running nine rigs companywide, including six in the WTO, compared with 26 in the WTO in the 2008 fourth quarter and a high of 47 companywide in the 2008 second quarter.
The company recorded a pretax, noncash impairment charge of $1.86 billion against the carrying value of its gas and oil properties for the last quarter of 2008.
The 5.7 tcfe of net proved, probable, and possible reserves in the company's Pinon holdings are almost totally in the Dugout Creek and Warwick thrusts (see map, OGJ, Nov. 28, 2008, p. 34).
Frog Creek, the most recent of the three to have commercial production, appears on 3D seismic to be similar in size to the other two thrusts. Recent production tests yielded methane with less than 3% carbon dioxide that the company believes can be developed at or below its current Pinon field finding costs.
Frog Creek's potential is in the Caballos chert at 3,500-5,500 ft.
The Big Canyon A 121-1A exploratory well 25 miles east of Pinon field is encouraging for future exploration because it tested 225 Mcfd of gas with only trace amounts of CO2. It went to a total depth of 16,847 ft and cut 543 ft of chert, a thickness comparable to Pinon field reservoirs but less fractured than at Pinon.
Estimated ultimate recovery from the Warwick Caballos reservoir increased in 2008 to 7.5 bcfe from 7 bcfe of total wet gas with an average 55% CO2. SandRidge has identified 1,265 locations to be drilled.
The company noted that it has drilled less than 15% of its nearly 700,000 contiguous acres in the WTO.