Falcon/TXM drilling for deep gas in Hungary

Feb. 6, 2006
Canada’s Falcon Oil & Gas Ltd. began drilling operations on its seven-well program in Hungary in November 2005.

Canada’s Falcon Oil & Gas Ltd. began drilling operations on its seven-well program in Hungary in November 2005. Falcon’s corporate offices are based in Denver, but it operates the deep gas project in Hungary through its wholly owned subsidiary Hungarian TXM Energy LLC, based in Budapest.

The company has two exploration licenses covering 2,329 sq km (575,263 acres) in south central Hungary, near the border with Romania (Fig. 1).

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In January 2005, Falcon/TXM acquired the first license to explore and drill 955 sq km (235,885 acres) in the Tizsa area from Mako Energy Corp.1 The Tizsa license initially became effective June 11, 2001, was set to expire on Dec. 31, 2005.

In June 2005, Falcon/TXM acquired a license over 1,374 sq km (339,378 acres) in the Makó area from Mako Energy. The Makó license was initially awarded Sept. 29, 1998, and was scheduled to expire on Dec. 31, 2005.

On Dec. 12, Falcon announced that the Hungarian government extended both the Tisza and Makó exploration licenses through Dec. 31, 2007. Well permits are issued by the Mining Bureau in Budapest and signed by the Mining Captain in Szolnok.

The play

The Makó basin trends northwest and is flanked by the Algyo structural high on the west and the Battonya structure on the east.1 Allan D. Laird, director at Falcon and managing director of TXM, told OGJ that the company views the play as a basin-centered gas accumulation (BCGA), similar to the Jonah gas field and Pinedale anticline in Wyoming’s greater Green River area. Ben Law originated the BCGA concept in the 1980s while he worked for the US Geological Survey.

This Hungarian basin has a geopressure gradient of more than 0.65 psi/ft, slightly less than that in the Green River basin. The rocks are also extremely hot, Laird said, in the range of high 300s-low 400° F. These are “expensive wells, in extreme conditions.”

Falcon says that John Gustavson of Boulder, Colo.-based Gustavson Associates Inc. assigned a potential resource of 796 million bbl of oil and 17.5 tcf of gas to two key Miocene formations within the Makó Trough: Szolnok and Endrod.

These are very thick sections of young (10 myo) sandy rocks, with permeabilities in the 0.1-1 md range. Wyoming’s Upper Cretaceous Jonah field, in comparison, has a permeability of only 0.01 md.

Miocene is considered very young for a BCGA, the youngest known, according to Ben Law.

Rigs, pipe

In June 2005, Falcon/TXM signed two drilling contracts with Croatia’s Crosco Drilling & Well Services Co. Ltd. to drill three wells in Hungary and secured options to drill four additional wells with two different rigs. Crosco will drill two or three shallow wells in the Tisza license area with its 4,000 m (~13,000-ft capacity) Rig 403 and one to four deep wells in the Makó license area with its 8,000 m (~26,000 ft) Rig 801.

Rig 403 was brought in from Croatia and Rig 801 was brought from Albania, where it had been working for Occidental Petroleum Corp. (OGJ, Dec. 19, 2005, p. 47). Falcon/TXM added a top drive to Rig 403.

In the same month, Falcon signed a $10 million purchase order with Aberdeen-based broker, Apex Tubulars Ltd., for 182,000 ft of drill pipe, casing, and other materials, primarily from German and Russian mills.

“These casing contracts are a key element of our drilling program,” said Laird, after signing the contracts, adding that premium casing is difficult to find right now.

Hungarian drilling requires pipe and equipment suitable for the high-temperature, high-pressure conditions. Expected well conditions are based on two key offset wells: the Hod-1 well in the heart of the trough and the Makó-3 well in the south.

The Makó basin discovery well was drilled in the 1960’s. Although there is limited gas composition data available from the Hungarian geological survey, Laird said that the company did not expect any H2S. There is a possibility of CO2, however, which raises the possibility of corrosion.

Geophysics

Falcon/TXM has an aggressive 3D program, Laird said, primarily vibroseis. The company uses Budapest-based GES for acquisition and some processing. GES was formerly a part of the national oil company, Magyar Olaj-Es Gazipari (MOL), privatized in the 1990s.

The company bought and reprocessed another 3D seismic dataset from MOL in early 2005, covering the north edge of the Tisza area. Falcon uses Gustavson Associates for some of its geophysical processing.

Falcon/TXM also ran three seismic surveys in 2005:

  • A 63 sq km, 7 x 9 km survey around Makó in spring.
  • A 16 sq km survey in summer, over wetlands in the Tisza area.
  • A 95 sq km survey, the largest to date, in the Mako area in the fall.

In February 2006, the company will begin the fourth seismic survey, in the Makó area.

Based on the seismic data, the company initially selected the Makó 5 well location and the Pusztaszer and Szekkutas locations (Fig. 1).

Operations

Falcon/TXM set conductor in both license areas in late October 2005. Crosco used Rig 403 to spud the Pusztaszer-1 (P-1) well (Fig. 2) and Rig 801 to spud the Makó-6 well.

Crosco’s drilling Rig 403 was on location at Falcon’s Pusztaszer-1 well site in Hungary in October 2005 (Fig. 2; photo from Falcon Oil & Gas Ltd.).
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Falcon upgraded its previously announced drilling locations based on new data from summer seismic programs. The P-1 well is an S-shaped, directional well, planned to avoid a nearby national park and wetlands, and drilled with downhole motors.

In January, Falcon’s President and CEO Marc A. Bruner said “both rigs are making good progress...and the operations team has proceeded to construct the next surface location at Szekkutas-1.”

Halliburton is on location to provide drilling and project management. Schlumberger is providing cementing and logging services.

Laird told OGJ that the company would move Rig 403 to the Szekkutas well location from the P-1 well site in late January or February. This rig is limited to drilling the shallower locations on the basin margin, and the Szekkutas location is on the eastern edge.

The Makó-6 is a nearly vertical well, planned to test a four-way closure. It will take about 4 months to drill, and the rig will be ready to move in March 2006 to another Makó location (4, 5, or 7).

More than 10,000 wells have been drilled in Hungary, with major discoveries in the 1950s-70s. Falcon/TXM’s activities could spur more. The company says it is learning a lot from recent drilling and expects significant breakthroughs and higher penetration rates than seen in the past, thanks to the updated drilling equipment.

References

  1. Lencioni, L.C., Resource Evaluation Report on the Makó Trough Property, Hungary (N151-101), Mar. 15, 2005.
  2. www.falconoilandgas.com.