Crimson Exploration Inc., Houston, has summarized continued success in its East Texas Woodbine and Karnes County Eagle Ford programs and provided an operational update on its Liberty and Zavala County activity.
In Madison and Grimes counties, Texas, Crimson has 18,500 net acres in Madison and Grimes counties that cover three areas the company refers to as Force, Iola-Grimes, and Chalktown, where it has been developing the Woodbine. Production tests have confirmed the oil potential in all three areas.
The Woodbine section has slightly different characteristics in each area, including different sand lobes in the overall Woodbine section, and it is expected that more than one well will be required in each area to optimize the best landing point and completion practices.
“Crimson is very encouraged by the results to date and confident that this area will deliver a multiyear inventory of impactful and superior rate of return oil projects which will contribute significantly to Crimson’s growth story,” the company said.
Crimson has identified 115 net potential drilling locations on its Woodbine acreage based on 160-acre spacing. Assuming the company’s average type curve estimated ultimate recovery of 400,000 bbl of oil equivalent, 90% oil and natural gas liquids, per location, total net potential exceeds 34 million boe or more than five times Crimson’s net liquids reserves booked at yearend 2011.
In addition to the Woodbine activity, around Crimson’s acreage multiple operators are developing the Eagle Ford, Georgetown, Buda, and Glen Rose formations, all using the same horizontal and multistage frac completion technology employed in the Woodbine.
Recent Eagle Ford wells drilled in adjacent Brazos, Robertson, and Leon counties have had initial potentials in excess of 600 b/d of oil. The Eagle Ford section across Crimson’s acreage position has similar reservoir characteristics, thickness, porosity, resistivity, and shows in existing wells. Assuming development on 80-acre spacing, the Eagle Ford could add as many as 230 locations and 68 million boe of net potential to Crimson’s position.
An offset operator adjacent to Crimson’s Force acreage recently tested the Georgetown at an initial rate above 700 b/d of oil. The Georgetown is a 300 ft thick carbonate section that has historically produced from both vertical and horizontal open hole completions.
The use of horizontal multistage frac completions potentially changes the Georgetown from a statistical play to a repeatable resource opportunity. Assuming development on 320-acre spacing, the Georgetown could potentially add as many as 58 locations and 17 million boe of net potential to Crimson’s position.
The evolution of the Buda lime is similar to that of the Georgetown, where recent wells employing horizontal multistage fracs have resulted in initial rates of more than 600 b/d of oil. This technology potentially also converts the Buda to a repeatable resource opportunity. Assuming development on 320-acre spacing, the Buda could add up to 58 locations and 17 million boe net potential to Crimson’s position.
Crimson owns 5,750 net acres in the Force area of Madison County. Since January 2009 more than 50 wells have been completed in Madisonville-West field area using modern horizontal drilling and fracture stimulation completion techniques. These wells have targeted the same Woodbine sand that Crimson is developing in the Force area and have had average initial rates of 600 b/d of oil.
Crimson’s type curve for the Force area, which considers lateral length and the perf and plug completion technique, uses an initial potential of 800 b/d of oil and an EUR of 400,000 bbl of oil equivalent to generate an IRR of greater than 80% at current oil prices. Crimson’s first two producing wells in the Force area initially averaged more than 900 b/d of oil, and Crimson considers the Force area to be substantially derisked.
The Mosley-1H, Crimson’s first horizontal Woodbine oil well in the Force area, has produced 128,000 boe in its first 4 months of production. Crimson has 84.3% working interest. The Pavelock-1H recovered 80,000 boe in its first 70 days. Crimson has 2.7%.
The Grace Hall-1H was completed and turned to production in early June at 884 b/d of oil, 61 b/d of natural gas liquids, and 809 Mcfd of gas. Measured total depth is 15,900 ft including a 7,200-ft lateral, and Crimson applied a 26-stage frac. Crimson has 82.5%.
The Payne-1H is under completion, having been drilled to 16,130 ft measured depth including a 7,460-ft lateral. Crimson’s interest is 92.1%.
The company has 7,650 net acres in the Iola-Grimes area of Grimes County. The area is an active development in northwestern Grimes County testing a stratigraphically older Woodbine sand not present in the Force area. The nearest offset horizontal well to produce from this Woodbine objective is 1 mile northwest of the A. Yates-1H and has produced 179,000 bbl of oil in 10 months. The Yates success and successful delineation by the Covington-Upchurch well will substantially derisk the Iola-Grimes area.
The A. Yates well, in which Crimson has 50% working interest, was turned to production in early July at 397 b/d of oil, 32 b/d of NGL, and 322 Mcfd of gas. Measured total depth of 15,320 ft includes a 6,065-ft lateral. Completion involved a 22-stage frac. Clean-up continues.
The Covington-Upchurch-1H, Crimson 67.8% interest, is drilling at 4,200 ft towards an MTD of 15,500 ft that will include a 6,000-ft lateral. This well replaces the previously disclosed Stuckey-1H well, expected to be drilled at a later date.
Crimson holds 5,100 net acres in the Chalktown area of Madison County. The Chalktown area tests the Lewisville sand, a lower Woodbine objective that has produced from vertical wells in the immediate area. Crimson’s Vick Trust-1H well, 75% working interest, appears to be producing extraneous water, possibly in communication with a natural fracture.
Crimson has been working to identify and shut off the source of the water to better test the oil potential. Initial production has indicated an oil-weighted reservoir, and further results will be released once these issues are addressed and evaluated.
The Vick Trust-1H went to 14,660 ft MTD including a 5,760-ft lateral and had a 21-stage frac. Production rate to date has been as high as 140 b/d of oil, 38 b/d of NGL, and 285 Mcfd of gas.
Meanwhile, in Karnes County, Crimson has 90.7% working interest in the Glasscock B-1H, turned to production in May at a gross 545 b/d of oil, 70 b/d of NGL, and 422 Mcf of gas on a 12/64-in. choke and 2,107 psi of tubing pressure, after a 14-stage frac. MTD is 15,295 ft including a 4,380-ft lateral, which is 1,080 ft shorter than the company’s average Karnes County lateral due to lease configuration limitations.
Crimson has two more primary locations on 120-acre spacing that will likely be drilled in 2013 and is closely monitoring the ongoing success of downspacing activity by an offset operator for a possible downspace strategy for another 9-10 wells in the future.
In Zavala County, Crimson plans to complete the KM Ranch-2H well with 50% working interest in mid-third quarter. As previously disclosed, Crimson delayed completion to further understand optimal completion techniques being developed by other area operators.
One offset operator recently completed two Eagle Ford wells with initial production rates above 900 and 1,400 boe/d. Adjacent to the Booth-Tortuga area, where Crimson drilled the Beeler-1H well, a private operator drilled three horizontal wells into the Buda formation. Crimson will monitor progress at these wells and determine a development plan for this potential resource in late 2012 or early 2013.
In Liberty County, Crimson with 60.8% interest sidetracked the Catherine Henderson A-6 to 12,940 ft MD and plans to complete the Upper Cook Mountain sand in a few weeks. The original well was lost due to mechanical problems and last produced in January 2012 at a gross 8 MMcfd.