Westmont buys into Marcellus-Chattanooga oil, gas play

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, July 30 -- Westmont Resources Inc. has completed an agreement to acquire 92 wells in Tennessee’s Chattanooga shale region, currently operated by AG Oil & Gas, a division of Domestic Energy Corp. Terms of the agreement were not disclosed.

“This is a strategic step and a natural extension into the Chattanooga," said Westmont Pres. Glenn McQuiston.

AGOG said its operations are centered on the emerging Chattanooga shale play in the southern Appalachian basin, near the CNX X horizontal discovery well, which was reported to have an initial production rate of 3.9 MMcfd and sustained production in the range of 300-400 Mcfd.

AGOG said it earlier acquired the rights to 90 existing wells in Scott and Morgan counties of Tennessee that cover about 30,000 acres.

“Within this block the Chattanooga shale lies at a depth between 1,000 ft and 2,000 ft and is between 20-50 ft thick,” AGOG said. “Most of the acquired wells suspended drilling operations well above the top of the Chattanooga shale,” it said.

Westmont agreed with that assessment, saying that “most of these wells suspended drilling operations well before the now known pay zones which sit on top of and include the Chattanooga and Marcellus shale deposits.”

AGOG said it originally intended “to reenter the wells and deepen them for vertical completion in the shale by using the most advanced technologies in vertical and horizontal drilling linked with modern fracturing methods.”

McQuiston agreed with that, saying it is the right time for his firm to take over the acreage “because recent advances in seismic technology and continued enhancements in facilities design have reduced the risks in one of the world's oldest basins which is now showing significant renewed potential."

Westmont management, which will conduct an audit of the 92 oil and gas wells in the Chattanooga basin, currently estimates the potential and probable reserves associated with the acquisition to be valued “in excess of $200 million.”

Meanwhile, Westmont has developed a three-phase plan of development for the region. Phase 1, to take place in the first 6 months, will include placing all wells back into production at current well depth by repairing well equipment, lines, and cleaning well casing. Estimated production levels 25-40 Mcf/well/day and 3 b/d of oil.

Phase 2, to occur at the 7-18 month point, will involve redeveloping all wells to an estimated 1,500-2,000 ft vertical depth to take advantage of the three known pay zones in the region (Monteagle limestone; Fort Payne limestone; Chattanooga shale). Estimated production levels are to increase to 75-120 Mcf/well/day and in excess of 6 b/d of oil. These levels have been demonstrated in several completed vertical wells in the area.

Phase three, during months 19-24, will include redeveloping all wells using the most advanced technologies in vertical and horizontal drilling linked with modern fracturing methods to take advantage of the higher yielding Chattanooga shale zones. Estimated production levels are anticipated to increase to 150-300 Mcf/well/day and 9 b/d of oil.

Contact Eric Watkins at hippalus@yahoo.com.

Related Articles

Severance tax would backfire, Pennsylvania association leaders warn

12/17/2014 Enacting a severance tax aimed at Pennsylvania’s unconventional natural gas activity would substantially harm the commonwealth beyond the industry ...

New York state moves to ban hydraulic fracturing

12/17/2014 High-volume hydraulic fracturing will be banned in the state of New York, Gov. Andrew Cuomo’s administration announced Dec. 17, citing health risks...

EIA: US proved oil, gas reserves continue to climb

12/15/2014 US proved reserves of oil and natural gas have increased by 9% and 10%, respectively, according a recent report from the US Energy Information Admi...

US Forest Service takes no stance on fracturing in national forest

12/12/2014

The US Forest Service has dropped a proposal that would have banned hydraulic fracturing in the George Washington National Forest.

Southwestern makes $5.4 billion bet on Marcellus

12/12/2014 Southwestern Energy Co. is purchasing Appalachian assets from Chesapeake Energy Corp. in a deal that more than doubles its leasehold in the Marcell...

Study links methane contamination in water wells to poor well construction-not fracing-in Marcellus

12/12/2014 A new study found that fugitive gas contamination at eight clusters of water wells in the Marcellus and Barnett shale regions might be linked to we...

Watching Government: Did Maryland go too far?

12/08/2014 Maryland finally proposed a strategy to regulate unconventional natural gas exploration and production on Nov. 25. The question quickly moved from ...

US proved oil, gas reserves continue to climb

12/04/2014 US proved reserves of oil and natural gas have increased by 9% and 10%, respectively, according to the US Energy Information Administration. The 3....

Southwestern continues Marcellus expansion

12/03/2014 Southwestern Energy Co., Houston, has signed an agreement to purchase oil and gas assets, including 46,700 net acres, in northeast Pennsylvania fro...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected