Record Barnett HC content seen in combo play

Alan Petzet
OGJ Chief Editor-Exploration

HOUSTON, Dec. 2 -- Hydrocarbon content in the thickest part of the Mississippian Barnett shale combo play in North Texas is so great that even 2-3% recovery is highly economic, said EOG Resources Inc., Houston.

Barnett thickness reaches 1,500-1,700 ft thick in the eastern part of the combo play’s 90,000-acre core area in eastern Montague and western Cooke counties on the north side of the Fort Worth basin. There, EOG estimates the formation contains 70 million bbl of oil and 175 bcf of gas in place/sq mile, Loren M. Leiker, senior executive vice-president, exploration, said in late November.

“Hydrocarbons in place [are] more than anywhere else really in the world that we’ve seen so far” because the formation is so thick and the hydrocarbon charge so rich, Leiker said in describing EOG as the only material participant in the combo play.

EOG plans to run 12 rigs and drill 225 combination play wells in 2010. It has proven more than 50 million boe recoverable to date and had booked 8.4 million boe of reserves by the end of 2008.

EOG’s position in the Barnett gas play is “going fine,” Leiker said, with 650 drillable locations in Johnson and Hill counties of the company’s 1,000 remaining gas sites. While growing its gas revenue base modestly, EOG is emphasizing liquids the next few years to improve its flexibility to capitalize on whichever hydrocarbon type is more economically desirable.

EOG has drilled 100 wells in 3 years in the combo play, with initial potential rates at 300-1,000 b/d of oil, 130 b/d of natural gas liquids, and 1-2 MMcfd of gas, but it has had to climb a learning ladder, Leiker said. The early mistake was trying to apply horizontal drilling and fracturing technology learned in the Barnett gas areas to basically the same rock type in the oilier combo play.

Leiker wouldn’t detail EOG’s technology progress, but he said the company has convinced itself—with no more than 1.5 years on production in its oldest combo area—of its ability to sustain the play’s long term profitability and will soon have enough production history to release publicly.

EOG holds 210,000 net acres in Montague and Cooke counties and 144,000 acres in Clay and Archer counties. Of that, 175,000 acres are underlain by a competent Viola bottom seal.

Leiker said the Barnett is so thick in the eastern 10-15% of the core area that EOG can get horizontal-caliber production and reserves from cheaper vertical wells. The company is pursuing both horizontal and vertical development depending on the formation’s thickness in each sector.

An eastern core area vertical well will recover 220,000 boe at $2.2 million or a 70% rate of return, and horizontals will tap 280,000 boe at $3.3 million or 60%.

EOG’s estimates of ultimate recovery are increasing with experience. In November 2009 compared with March 2008, the company estimated it will recover 78,000 bbl of oil/well, up from 75,000; 94,000 bbl of NGL, up from 34,000; and 674 MMcf of gas, up from 260 MMcf. The amounts are net after royalty.

Contact Alan Petzet at alanp@ogjonline.com.

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