Thick shale gas play emerging in Spain's Basque area

Analysis of drilling and test data from 14 wells drilled since the 1950s has indicated the presence of a world class shale gas play in the Basque Country of northern Spain.

Of 14 wells that penetrated the Cretaceous shale, 10 tested gas and only three penetrated the entire section.

A group led by the Basque national oil company will drill its first two appraisal wells in 2012. The 14 earlier penetrations collectively led to an independently estimated midrange resource of about 200 tcf of free gas and adsorbed gas in place.

The Basque Country’s Soc. de Hidrocarburos de Euskadi SA (Shesa) has 44% interest in four blocks 180 miles north of Madrid. Private independents HEYCO Energy Group, Dallas, and Cambria Europe Inc., Casper, Wyo., a True Oil affiliate, have 36% and 20%, respectively.

The firms are talking with other companies about participating in the appraisal program.

Spain, with five liquefied natural gas terminals, is the world’s third largest importer of LNG.

Basque officials, including the country president, toured Barnett shale field sites in the Fort Worth basin earlier this month and visited with Texas regulatory representatives to learn about the operation and regulation of unconventional plays. They have dubbed the Basque Country play as Gran Enara.

Thick Cretaceous shale

The two vertical appraisal wells will go to 15,000-17,000 ft, and as much as two thirds of each wellbore will penetrate the objective formation, said George Yates, president, HEYCO Energy.

The overpressured Cretaceous Valmaseda formation is about 60% shale interbedded with 40% tight sands and should be easy to frac, Yates said. The two appraisal wells will be tested into gas pipelines.

The Valmaseda formation has neither been horizontally drilled nor hydraulically fractured, Yates said.

Drilling in Spain averages five wells/year. Rigs capable of drilling the appraisal wells are available in Europe and North Africa. Halliburton and Schlumberger have frac kits elsewhere in Europe capable of the services the group needs in Spain, he said.

The Valmaseda gas is almost pure methane with no liquids and no impurities, Yates said.

The Valmaseda formation underlies 60% of the combined 738,143 acres of the four permits, and each of the four permits contains prospective Valmaseda. Valmaseda underlies Alava and Burgos provinces, and the four permits underlie parts of Alava, Burgos, Navarra, and Vizcaya provinces.

The four permits contain the entire Valmaseda play.

The group’s four blocks lie east and northeast of the 150,000-acre Urraca concession held by BNK Petroleum Inc. subsidiary Trofagas Hidrocarburos SL that primarily targets a slightly shallower shale of Jurassic age farther west in the Cantabrian basin (OGJ Online, Sept. 21, 2011).

Realm Energy International Corp., Vancouver, BC, soon to merge with San Leon Energy PLC, has been awarded two shale permits in the basin. Several other concessions are in force in the general area, and still more are pending.

Natural gas prices in Spain are in the neighborhood of $8/Mcf.

Historic well results

The 13 wells on the Shesa group’s acreage are “separated enough to give us an idea of the lateral consistency of this reservoir,” Yates said.

Only a few of the 14 wells were drilled with the Valmaseda sands, and several early wells targeted what the operators thought would be the Ultrillas as primary or secondary targets. None was drilled with the shale as a target.

Of the 10 wells that flowed gas on tests, DSTs averaged less than 1 MMcfd. Seven DSTs exceeded 1 MMcfd, and one test rate reached 9.9 MMcfd. Final shut-in pressure was much lower than initial shut-in pressure, indicating low matrix permeability.

Three of the wells were completed, and two of them were probably commercial, Yates said. Cumulative production is 1.03 bcf at Castillo-1, while Castillo-2 was completed to sales but abandoned prematurely for a mechanical problem (OGJ, July 2, 1990, p. 70).

Another well hit a fracture 160 m into the Valmaceda while drilling underbalanced and flowed at an observed rate estimated at 30 MMcfd before being brought under control. It produced 560 MMcf and was abandoned at fairly high pressures, Yates said.

If the play works, it will result in substantial development, employment, and economic advantage to the Basque region.

Contact Alan Petzet at alanp@ogjonline.com.

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